Undeclared rental income: how the Let Property Campaign works

What the Let Property Campaign is

The Let Property Campaign is HMRC's disclosure facility for landlords who have undeclared income from residential letting. It exists so that people who should have told HMRC about rental income, and didn't, have a clear way to come forward and bring their affairs up to date.

It covers a wide range of situations. You might have let a former home after moving in with a partner. You might rent out a single buy-to-let, a room, a holiday let, or a property abroad. You might have inherited a house and let it without realising the rent was taxable. Whatever the reason, if there's residential rental income you haven't declared, this is the facility built for you.

It's worth being clear about what it isn't. It isn't an accusation, and it isn't only for people who set out to hide income. Plenty of disclosures come from landlords who simply got it wrong, misunderstood the rules, or let things drift for a few years. HMRC treats those differently from deliberate concealment, which matters when it comes to working out what you owe.

Why coming forward first matters

There's an understandable instinct to keep quiet and hope it goes unnoticed. The difficulty is that HMRC is steadily better at spotting undeclared landlords than it used to be.

It cross-references a lot of data. Land Registry records show who owns what. Letting agents report the rent they collect on landlords' behalf. Tenancy deposit schemes hold details of deposits taken. Banks and other sources feed in too. When those threads point to rental income that has never appeared on a tax return, HMRC can open an enquiry, and at that point you've lost the chance to come forward voluntarily.

That difference is the whole point of the campaign. Disclosing before HMRC contacts you is treated as an unprompted disclosure, and cooperating voluntarily generally means lower penalties than being caught after an enquiry has started. The tax and interest you owe don't change, but the penalty on top of them usually does, and the gap can be significant.

What disclosing actually involves

The process has a defined shape, and knowing it removes a lot of the fear. There are four stages.

Notify. You tell HMRC you intend to make a disclosure under the Let Property Campaign. This registers your intention and starts a clock running for the next stage.

Calculate. You work out what you owe. That means income and allowable expenses for each year you should have declared, the tax due on the profit, interest for paying late, and a penalty. How many years you need to go back depends on the behaviour behind the omission. If you took reasonable care and the error was innocent, you go back 4 years. If you were careless, it's 6 years. And where the behaviour was deliberate, HMRC can look back up to 20 years.

Disclose. You submit the figures to HMRC, including the penalty you believe is fair given your circumstances. Coming forward unprompted and cooperating fully means a lower penalty than where HMRC had to prompt you. For an unprompted disclosure of a careless inaccuracy, the penalty can be reduced to nil. For deliberate but not concealed behaviour, the penalty range is 20% to 70%.

Pay. You pay what you owe within the window HMRC sets after you make your disclosure, commonly 90 days. If you can't pay it all at once, you can ask to arrange a payment plan.

The honest part to hold onto is that outcomes vary. Cooperation reduces your exposure, but it doesn't erase the bill, and how much it helps depends on the years involved and the reason behind the omission. Anyone promising a fixed result without seeing your figures isn't being straight with you.

Where to get help, and staying right from here

This is one area where careful figures genuinely matter. Getting the years, the expenses, the interest and the penalty position right takes some work, and the penalty you propose is something HMRC can question. Many landlords use HMRC's own Let Property Campaign guidance and, where the figures are involved, an accountant who handles disclosures.

Whatever you decide on the disclosure itself, the most useful thing you can do now is make sure your rental income is declared properly from this point on. If you've never filed before, that starts with getting registered for Self Assessment so the current year and every year after it are on a clean footing. And if part of what made the past years go wrong was missed deadlines or a return that slipped, it's worth understanding how penalties build so they don't catch you again.

Coming forward is the hard part. Once it's behind you, the goal is simply a return that's right, on time, every year, with no quiet worry sitting in the background.