Undeclared Rental Income: What You Need to Know About HMRC’s Let Property Campaign

The Let Property Campaign is a UK government initiative aimed at landlords who have not declared rental income and are therefore not paying the correct amount of tax. If you are a landlord with unpaid tax, you may be able to take advantage of the Let Property Campaign to disclose any unpaid tax and bring your tax affairs up to date. Penalties for undisclosed rental income can range from 0% – 100% depending on the circumstances of the failure to disclose. Many factors play a role in the penalty including whether it was deliberate or not and whether the disclosure was voluntary. To read more about how the HMRC calculates these penalties you can check out our post: Failure To Notify Penalty.

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What Is the HMRC Let Property Campaign?

The Let Property Campaign is a program launched by HM Revenue and Customs (HMRC) in the United Kingdom aimed at landlords who have not declared their rental income. It provides landlords with the opportunity to bring their tax affairs up to date voluntarily and receive more favourable terms. Under the program, landlords are required to disclose any previously undeclared rental income and pay any outstanding taxes, interest, and penalties owed to HMRC. The program is open to all landlords, including those who rent out a single property, multiple properties, or a room in their own home, often supported by tax advisor london. If you’re a landlord lying awake at night worrying about undeclared rental income, you’re not alone. HMRC’s Let Property Campaign (LPC) is still live in 2025 — and with new data-matching, nudge letters, and DAC7 reporting from Airbnb and other platforms, landlords across London are under the microscope. The anxiety many landlords feel isn’t just about numbers; it’s about uncertainty, fear of penalties, and not knowing how far HMRC might go back. At CIGMA Accounting Ltd, we understand these internal struggles. Landlords often arrive to us nervous and overwhelmed, fearing the worst. We go beyond filling out forms — we explain, reassure, and strategically challenge HMRC where necessary. In fact, in some cases, we’ve brought penalties down to zero by demonstrating context and cooperation. That combination of expertise and empathy means our clients leave not just compliant, but confident and calm

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HMRC DISCLOSURE FACILITY

The Let Property Campaign is HMRC’s disclosure facility for landlords who haven’t declared all their rental income. It applies to:

UK residential landlords (buy-to-let, HMOs, single lets, multiple properties).
Overseas landlords with UK rental income.
Accidental landlords (inherited property or moved home).
Short-let landlords (Airbnb, Booking.com) — a growing target since DAC7 reporting began in 2024.

Not included:

Companies.
Trusts.
Commercial property landlords.

Reference: HMRC – Let Property Campaign.

How the Disclosure Works (Step-by-Step)

The LPC runs via HMRC’s Digital Disclosure Service (DDS):

Notify HMRC – register intent to disclose.
Receive DRN/PRN – HMRC sends reference numbers.
90-Day Window – calculate tax, interest, and penalties.
Submit & Pay – disclosure is submitted and settled (or Time to Pay arranged).

Many landlords tell us the 90-day window feels like a ticking clock. That’s where CIGMA steps in — we manage the process, keep the timeline on track, and ensure you don’t make costly mistakes under pressure.

How Many Years Back Must You Disclose?

4 years – where reasonable care was taken but an error occurred.
6 years – if careless.
12 years – offshore income.
20 years – deliberate behaviour.

Example: A Wimbledon landlord who misapplied mortgage interest rules may only need a 6-year disclosure. By contrast, a Canary Wharf portfolio landlord who knowingly omitted offshore rents could face 20 years. Reference: HMRC Compliance Manual – Time Limits.

Penalties: What Landlords Fear Most

Behaviour	Unprompted Penalty	Prompted Penalty	Example
Reasonable care	0%	0%	Landlord in Sutton made a minor calculation error; HMRC accepted no penalty.
Careless	0% – 30%	15% – 30%	Wimbledon landlord forgot to declare Airbnb side-income; reduced penalty with cooperation.
Deliberate	20% – 70%	35% – 70%	Farringdon landlord knowingly excluded rental income for years; reclassified as careless by CIGMA, penalty cut to zero.
Deliberate & concealed	30% – 100%	50% – 100%	Chelsea landlord hid income using offshore accounts; penalties negotiated down with expert intervention.

At CIGMA, we know that behind every “deliberate” label there’s often a story — confusion, poor advice, or life circumstances. We’ve successfully reclassified “deliberate” cases as “careless,” reducing penalties to zero. Reference: FA 2007 Sch 24 – Penalties.

benefits of the campaign

While you may not side-step all the penalties of not declaring rental income, the Let Property Campaign offers many benefits and incentives to landlords to declare their rental income, including support from tax services london:

Reduced penalties.
A simpler and more streamlined process for bringing tax affairs up to date.
The opportunity to spread payments over a period of time.
Landlords who voluntarily disclose their rental income may also avoid criminal prosecution.

What Are The Let Property Campaign Requirements?

The campaign is designed to encourage landlords who have not declared rental income to come forward and declare it voluntarily to work with the HMRC. In order to take part in the campaign, you need to meet the following requirements:

You must be a landlord who is renting out residential property in the UK or abroad.
You must not have declared all of your rental income on your tax returns.
You must not be currently under investigation by HM Revenue and Customs (HMRC).
You must not have received a letter from HMRC telling you that they suspect you have unpaid taxes.

Enquire Now About Let Property Campaign Support

Case Studies: Turning Anxiety Into Relief

Sutton – Family Landlord

One landlord hid unopened HMRC letters in a drawer for years out of fear. After coming to us, we secured a nil penalty outcome. The relief they felt was as valuable as the financial saving.

Wimbledon – Accidental Landlord

Inherited a property, rented it, and didn’t realise income had to be declared. HMRC classed this as “deliberate.” We fought to show genuine mistake. Penalties: £22,000 → £0.

Farringdon – Airbnb Host

DAC7 reporting flagged undeclared income. The client panicked about reputational risk. We negotiated expenses, reduced tax due by 40%, and restored peace of mind.

Chelsea & Mayfair – Portfolio Investor

Complex 12-year disclosure. HMRC demanded high penalties. We delivered a structured disclosure and brought penalties down by hundreds of thousands. The client later said: “You gave me my life back.”

Canary Wharf – Consultancy Landlord

Staring at a potential £250,000 liability, the directors feared insolvency. With CIGMA’s intervention, penalties were halved and Time to Pay agreed — preserving both their business and reputation.

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“Knowledgeable, easy going and efficient service. We are able to meet all our fiscal requirements in a quick, reliable way that doesn’t add a financial burden to our organization.”

Michele

Project Zero

“Haroon has a genuine desire to understand the business and not just the numbers. He provides the attention of a close personal friend”

Alain

Clock House Consulting – IT consulting and software development house

“I felt you understood my needs, and what my business entailed. I liked the fact that you had a PT background, and seemed down to earth”

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Tom Wilson Leonard

Yoga teacher, personal trainer and photographer

“After our initial meeting, we were confident that CIGMA could offer us the help we needed… you allowed us to focus more on the other parts of running the business”

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2. Calculate the amount of tax you owe and make a disclosure to HMRC.

Calculating the amount you owe to the HMRC can be challenging. Especially if the tax returns need to be back-dated due to undeclared rental income for previous years.

A tax consultant like CIGMA Accounting can assist you by looking at your income and expenses holistically and completing the tax return calculations to minimise your tax liability as much as legally possible.

The HMRC is likely to request a complete Self Assessment (personal tax return). If you have never completed a self assessment before, you can read this informational blog: Do I need to Submit a Self Assessment?

3. Pay any tax you owe to HMRC.

4. Make sure you keep up-to-date with your tax affairs in the future.

One of the most important things you can do as a landlord to stay compliant with the Let Property Campaign is to keep accurate records of your rental income and expenses. This includes keeping receipts for any repairs or maintenance you have done on the property, as well as any expenses related to advertising or finding tenants. You should also keep track of any rental income you receive, including the dates and amounts of each payment. By keeping detailed records, you can ensure that you are accurately reporting your rental income and expenses and avoid any penalties for non-compliance. Optimise your business finances with the best accountants in Wimbledon. Schedule a meeting with Cigma Accounting!

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Benefits of Having A Professional Tax Advisor

It is important to declare all rental income on your tax return, even if you are not making a profit from your rental property. Tax return specialists, often working alongside accountants london, know exactly what they need to do for you to reap the most benefits from government campaigns and assistance programs. Some benefits of having a professional accountant or tax advisor on your side are:

They can ensure that you are taking advantage of all available deductions and credits
Provide guidance on how to properly report your rental income.
If you are ever audited by the HMRC, they can minimise the risk of any penalties or fines
Up to date with the latest legislation for rental income

Need to disclose undeclared income but don’t want to talk to the HMRC? We can help! Reach out to us by completing this form and one of our staff members will get in touch within one business day.

Allowable Expenses: Common Landlord Mistakes

Many landlords overpay because they don’t claim all allowable expenses — or they incorrectly claim disallowed costs. Examples of allowable expenses:

Repairs and maintenance (but not capital improvements).
Letting agent fees.
Legal costs (only for renewing short leases or evicting tenants).
Mortgage interest (with restrictions — finance cost relief applies).
Council tax, utilities, insurance when paid by the landlord.
Replacement of domestic items (furniture, appliances).

Common mistakes:

Confusing improvements with repairs (e.g., adding an extension ≠ deductible).
Not splitting expenses correctly in joint ownership cases.
Misunderstanding mortgage interest restrictions post-2020.

Related link: Landlords Accounts – CIGMA

Step-by-Step Checklist for Landlords

If you’re preparing a disclosure, here’s what you’ll need:

Property addresses, ownership details, and rental dates.
Rental income statements (bank statements, Airbnb/Booking.com reports).
Expense receipts (repairs, insurance, letting fees, etc.).
Mortgage interest summaries.
Previous tax returns and accounts.
Details of joint ownership splits (Form 17 if applicable).
Evidence of overseas property income if relevant.
Copies of correspondence from HMRC (including nudge letters).

Many landlords freeze at this stage — overwhelmed by paperwork. At CIGMA, we simplify it with secure, GDPR-compliant systems, ensuring data safety and peace of mind. Related link: Bookkeeping Services London – CIGMA

FAQs: Answering What Landlords Really Ask

What if I’m scared to contact HMRC?
You’re not alone — fear is the most common barrier. The Let Property Campaign is designed to encourage voluntary disclosure, and unprompted disclosures almost always lead to lower penalties. CIGMA can act as your representative, shielding you from direct contact and reducing stress.

Can HMRC put me in prison for undeclared rent?
In almost all landlord disclosure cases, HMRC seeks settlement (tax, interest, penalty), not prosecution. Prison is reserved for serious fraud. Acting voluntarily through the LPC reduces this risk significantly.

How long do I have to put everything right?
Once you notify HMRC, you have 90 days to calculate, disclose, and pay. With CIGMA managing the process, this window becomes less stressful and more structured.

What if I can’t afford to pay all at once?
HMRC offers Time to Pay arrangements. We regularly negotiate affordable monthly plans, making disclosure financially manageable.

I’m worried HMRC will assume the worst. Will they?
Not if the disclosure is clear, complete, and supported by evidence. Our role is to present your case in the best possible light, reducing assumptions of “deliberate” behaviour.

How far back could HMRC go in my case?
It depends on behaviour. For most landlords, it’s 4–6 years. Only in deliberate or offshore cases could it stretch to 12–20 years. We assess and limit this exposure wherever possible.

What if I’ve already received an HMRC nudge letter?
You still have an opportunity to disclose — but penalties may be higher than if you come forward first. We can still help minimise the damage.

Can CIGMA really get penalties reduced to zero?
Yes, in many cases. By demonstrating genuine error or mitigating circumstances, we’ve achieved nil-penalty outcomes. Every case is unique, but our track record proves it’s possible.

Is my data safe if I disclose it through CIGMA?
Absolutely. All data is handled under strict GDPR protocols, using secure digital systems to protect sensitive information.

I feel embarrassed and overwhelmed — is that normal?
Completely. Many landlords feel ashamed or anxious before disclosure. Our job is not to judge but to guide, reassure, and resolve. Most clients say the relief after disclosure is life-changing.

Why Ignoring Isn’t an Option

We speak daily to landlords who have sleepless nights wondering, “Will HMRC find out?” The truth is, with Airbnb reporting, bank data, and nudge letters, the risk of discovery has never been higher. Doing nothing can mean harsher penalties, investigations, or even prosecution. Acting early puts you back in control.

Ask a Question About HMRC Voluntary Disclosure

Undeclared Rental Income and the Let Property Campaign: What Landlords Need to Know to Stay Compliant

The Let Property Campaign is an HMRC initiative designed to encourage landlords to disclose undeclared rental income and bring their tax affairs up to date, often reducing penalties compared to formal investigation outcomes. At Cigma Accounting, landlords across Farringdon, including Islington and Angel, are supported in understanding how to regularise past rental income and correctly submit disclosures. Working with a tax investigation accountant London helps ensure your disclosure is accurate, complete, and compliant with HMRC requirements.

From identifying previously unreported rental income to calculating tax liabilities, interest, and penalties, the process must be handled carefully to avoid further compliance issues. Cigma Accounting, with physical offices across London, provides expert HMRC disclosure services London designed to help landlords resolve undeclared income matters, reduce risk exposure, and achieve full compliance with HMRC regulations.

Undeclared Rental Income: Understanding the Let Property Campaign

The Let Property Campaign allows landlords to voluntarily disclose previously undeclared UK or overseas rental income to HMRC. Acting before HMRC contacts you can help reduce penalties and interest, but full disclosure and accurate reporting are essential to bring your tax affairs back into compliance.

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