Receiving a letter from HMRC about rental income is unsettling.
But in most cases, it does not mean you are being accused of anything.
How you respond next matters far more than the letter itself.
Many landlords are surprised to receive a letter because they assumed silence meant everything was fine, which I explain further in my guide on HMRC silence and Rental Income.
🎥 If you prefer to watch rather than read, this video explains what an HMRC letter about rental income usually means and how to respond calmly and correctly. Video is live on 18 January
You can continue reading the full written guide below.
1. Don’t ignore it
Ignoring HMRC correspondence is one of the fastest ways to turn a manageable issue into a serious one.
Even a short response is better than none.
2. Don’t panic or assume the worst
Most HMRC letters about rental income are:
- Nudge letters
- Prompts to review your position
- requests to register or correct information
They are often sent before any formal enquiry is opened.
3. Don’t reply without checking the facts
Before responding, you need to understand:
- When the rental started
- What income was received
- What expenses were incurred
- What has already been declared
Guessing or rushing a response can cause problems later.
4. What HMRC are usually looking for
HMRC typically want to know:
- whether rental income exists
- whether it has been declared
- whether any Tax is due
They are looking for clarity, not confrontation.
HMRC letters about rental income are often triggered by data mismatches, which I explain in my guide on What Triggers HMRC to Check Rental Income.
5. What helps resolve matters smoothly
Cases tend to progress more calmly where:
- information is accurate
- responses are timely
- the position is explained clearly
Early cooperation often limits escalation.
6. What not to do
Avoid:
- ignoring deadlines
- submitting incomplete information
- assuming HMRC already know the full picture
- trying to “fix” things without understanding the rules
Final word
An HMRC letter is not the end of the world — but it is a signal to stop assuming and start clarifying.
Handled properly, many rental income issues can be resolved without unnecessary stress.
This is especially common for people employed under PAYE who didn’t realise rental income sits outside their employment tax. I explain this further in my guide for Employed Landlords.
Unsure where you stand?
Rental income rules are often misunderstood, especially for PAYE Taxpayers and accidental Landlords.
If you’d like clarity on your position, you can contact us to discuss your circumstances.