Many Landlords only think about HMRC when a letter lands on the doormat.
By that point, HMRC are usually already aware of the rental activity.
So what actually triggers HMRC to look more closely at rental income?
It’s rarely one single thing. It’s usually a pattern of red flags.
🎥 If you prefer to watch rather than read, this video explains what triggers HMRC to check rental income and the common red flags landlords often miss.
You can continue reading the full written guide below.
1. Rental income with no Tax Return
This is the most common trigger.
If HMRC can see evidence of rental income but:
- no Self Assessment Return has been filed, or
- rental income is missing from an existing Return
that mismatch is flagged.
HMRC do not need to “suspect” wrongdoing.
The data itself is enough.
2. Letting Agents and Third-Party Data
HMRC receive information from:
- Letting agents
- Mortgage lenders
- Councils and licensing schemes
- Rental platforms
If that data shows rental activity, HMRC expect to see it reflected in a Tax Return.
HMRC increasingly rely on third-party data to identify undeclared rental income, which I explain in more detail in my guide on How HMRC Know You’re Renting out Your Property.
3. PAYE Taxpayers with undeclared rental income
Many people assume PAYE covers everything.
It doesn’t.
HMRC regularly identify PAYE Taxpayers who:
- earn employment income correctly taxed through Payroll
- but have undeclared rental income alongside it
This is one of the most common accidental errors Landlords make.
This issue is especially common for people employed under PAYE who also own rental property, which I cover in more detail in my guide for PAYE taxpayers with rental income.
4. Property owned but no matching income declared
HMRC can see:
- Property ownership
- Mortgage interest claims
- Changes in address or use
Where a property appears to be let but no rental income is declared, that inconsistency is flagged.
5. Rental losses with no reporting
A Loss does not remove the obligation to report rental income.
HMRC still expect:
- Income and Expenses to be declared
- Losses to be calculated and carried forward correctly
Unreported losses can still trigger a Review.
6. Silence does not mean approval
Many Landlords assume:
“HMRC never contacted me, so I thought everything was fine.”
HMRC often contact people years later, once data mismatches become clear.
Silence is not confirmation.
Not hearing from HMRC does not mean everything is fine, which I explain further in my guide on What it means if you never received a letter from HMRC.
Final word
Most HMRC checks into rental income are not triggered by tip-offs or investigations.
They are triggered by data not matching what HMRC expect to see.
If you own a rental property and are unsure whether your income has been declared correctly, checking early is far easier than dealing with it later.
Need clarity on your rental income position?
If you own a rental property and are unsure whether your income has been declared correctly — or you’ve received a letter from HMRC and don’t know what to do next — you may benefit from a professional review of your situation.
You can get in touch to discuss your circumstances and the appropriate next steps.