Many Landlords don’t realise they must report rental income — especially if the rent only just covers the mortgage or if there was no profit. Others assume their letting agent “takes care of it”. Some forget to declare a property abroad. And some simply didn’t know they needed to register for Self Assessment.
HMRC’s 2024/25 Annual Report makes it clear:
The rental sector is a key focus, and they are increasing investigations to close the tax gap. If you have undeclared rental income (UK or overseas), now is the time to put things right before HMRC contacts you first.
If you prefer to watch rather than read, I’ve also recorded a full video on the Let Property Campaign and the 2025 HMRC crackdown. Video is live tomorrow 19 November
You can now continue with the full written guide below.
This guide explains:
- How HMRC identify landlords who haven’t declared rental income
- What the Let Property Campaign is
- Who should and shouldn’t use it
- The process
- What records you need
- Common mistakes
- When to seek Professional help
1. Why HMRC Are Cracking Down on Landlords (2024/25 Update)
HMRC’s 2024/25 Annual Report confirms several new measures to reduce the Tax Gap. Rental income is a priority sector because HMRC now receive data from:
- Letting agents
- Airbnb and short-term platforms
- Councils and licensing registers (HMO, selective licensing, landlord registers)
- Deposit protection schemes
- Land Registry (property ownership links)
- Overseas banks and financial institutions (for foreign rental income). You can also read my guide on How foreign income is taxed in the UK, especially if you have a rental property overseas.
HMRC compares this data with Tax Returns.
If there is no matching rental income, a case is flagged.
This has led to:
- More “nudge letters”
- More discovery assessments
- More penalties
- Higher scrutiny of Landlords with multiple properties
- Follow-up checks if a Landlord ignores an initial letter
If HMRC contacts you first, you lose access to the reduced-penalty terms of the Let Property Campaign.
2. What Is the Let Property Campaign (LPC)?
The Let Property Campaign is HMRC’s voluntary disclosure programme for Landlords who haven’t declared all their rental income in the past.
It allows you to:
- Come forward voluntarily
- Correct past years
- Reduce penalties
- Draw a line under any previous non-compliance
It applies to:
- UK rental property
- Foreign rental income
- Renting out part of your home (lodgers)
- Holiday lets
- Property you inherited but now rent out
- Multiple properties
It can cover several years depending on your situation and the nature of the error.
If you prefer to watch rather than read, I’ve also recorded a full video explaining the Let Property Campaign, the HMRC crackdown, and what Landlords must do before making a disclosure.
You’ll find the video just below. – video is available tomorrow 18 November
3. Who Should Not Use the Let Property Campaign
LPC is not right for everyone. You should not use it if:
- You only need to amend a submitted Tax Return for a simple error
- Your case involves a Company, Trust or Partnership
- Your situation includes potential fraud or deliberate concealment
- You need to correct Self Assessment for non-property issues
- The property sits within a complex structure (offshore or multi-owner arrangements)
- Landlords of non residential properties
In these situations, other disclosure routes may be more appropriate.
4. What You Must Do Before Making a Disclosure
You need to gather complete records for all the years involved. HMRC expects you to:
- Work out the correct rental profit
- Identify claimable and disallowed expenses
- Calculate tax, interest and penalties
- Correct each year accurately
- Submit the numbers clearly and consistently
You should have:
- Bank statements for the relevant period
- Tenancy agreements
- Mortgage interest statements
- Maintenance and repair invoices
- Service charge statements
- Letting agent statements
- Overseas statements if the property is abroad
- Evidence of periods when property was empty
If records are missing, you must reconstruct them as accurately as possible. If you’re unsure what counts as an allowable expense, my blog on Business Expenses You Can and Can’t Claim gives a clear breakdown.
5. How the Let Property Campaign Process Works
Step 1 — Notify HMRC
You complete a short online form telling HMRC you want to disclose.
HMRC will then give you a Disclosure Reference Number.
Step 2 — Calculate the figures
You prepare:
- Rental statements
- Expense schedules
- Correct profit calculations
- Tax adjustments for each year
- Interest
- Penalty range based on your behaviour
- Explanations for the errors
If you need help organising your records, my Making Tax Digital guide explains simple ways to keep your rental information accurate.
Step 3 — Submit the full disclosure
You upload the full calculation pack and pay the amount owed.
Step 4 — HMRC review
HMRC may:
- Accept the disclosure
- Ask for clarification
- Request further evidence
- Open an enquiry if something doesn’t match their data
This is why calculations must be accurate and clearly supported.
6. Common Mistakes Landlords Make
I see the same issues repeatedly:
- Assuming “No Profit = No Tax Return”
- Not reporting overseas rental income
- Claiming Capital improvements as Repairs
- Missing mortgage interest restrictions (Section 24)
- Not keeping receipts
- Thinking they can’t use the LPC once HMRC gets in touch.
- Guessing figures instead of calculating properly
- Not including interest correctly
- Forgetting tax implications when properties switch between personal use and rental
These mistakes can increase penalties or trigger HMRC enquiries. I also have a separate article on Why Assumptions With HMRC often Backfire, which many Landlords find helpful.
7. How Many Years Do You Need to Go Back?
This depends on WHY the rental income wasn’t declared:
- Careless: Up to 6 years
- Deliberate but not concealed: Up to 20 years
- Deliberate and concealed: Up to 20 years (with higher penalties)
If the non-declaration was an honest mistake, HMRC generally expect up to 6 years.
8. Why You Shouldn’t Wait for a Letter
Once HMRC contact you:
- Penalties increase
- You may lose access to the LPC
- HMRC’s assumptions may be harsher than your own calculations
- Interest keeps building
- You risk an enquiry into other areas of your tax affairs
Voluntary disclosure is always safer.
9. When to Seek Professional Help
You should consider support if:
- You have more than one property
- Records are incomplete or mixed with personal spending
- You have overseas rental income
- You’re unsure what can be claimed
- You received a nudge letter already
- The property ownership is shared or split
- You want the disclosure prepared correctly and defended if HMRC ask questions
Every case is different, so a tailored review is the safest starting point.
10. How I Can Help
Before any disclosure is made, I carry out a structured review to:
- Check which years are affected
- Identify missing records
- Correctly separate allowable vs disallowed expenses
- Rebuild your figures if needed
- Prepare the rental calculations
- Identify the right disclosure route
- Minimise penalties
- Guide you through the full submission process
You remain fully involved — this is not something that can simply be “handed over”.
The goal is to give you clarity and ensure the numbers stand up to HMRC scrutiny.
Final Word
If you have never declared rental income, or only some years were filed, HMRC’s 2024/25 crackdown means you should act sooner rather than later.
Voluntary disclosure through the Let Property Campaign is often the most efficient way to put things right — but it must be done carefully.
If you’d like help reviewing your situation, you can contact me to discuss the next steps.