HMRC Disclosure Guide
Let Property Campaign: A Plain English Guide
Forgot to declare rental income? Don't panic. HMRC's Let Property Campaign lets you come forward voluntarily - and the penalties are significantly lower than if they find you first.
TL;DR - The Quick Summary
- •If you have undeclared rental income, HMRC's Let Property Campaign lets you come forward voluntarily
- •Penalties if you come forward: typically 0-30% (depending on behaviour)
- •Penalties if HMRC finds you: 15-100% (plus they're less forgiving)
- •Investigation period: 4 years (mistakes), 6 years (careless), 20 years (deliberate only)
- •We handle disclosures - you tell us the facts, we do the calculations and paperwork
Who Does This Apply To?
"Accidental" Landlords
Inherited a property, moved in with a partner, or kept your old home when you bought a new one. You might not have realised you needed to declare the rental income.
Landlords Not on Self Assessment
If you're employed (PAYE) and have rental income but never registered for Self Assessment, you may have undeclared tax to sort out.
UK Residents with Overseas Property
UK residents must declare worldwide income, including rental income from properties abroad. This is often overlooked.
How to Make a Disclosure: Step by Step
Check if you need a UTR
If you're employed (PAYE only) and have never filed Self Assessment, you'll need a Unique Taxpayer Reference. Register at gov.uk/register-for-self-assessment. Your UTR arrives by post in 10 working days (21 if abroad). Do this before notifying HMRC.
Notify HMRC through the Digital Disclosure Service
Go to the official Let Property Campaign page on gov.uk and click "Notify HMRC you intend to make a disclosure." This takes you to the Digital Disclosure Service. Complete the notification and save your disclosure reference number.
Calculate what you owe
Gather rental income for each tax year, mortgage interest statements, records of allowable expenses (repairs, agent fees, insurance), and your other income sources. We can handle this calculation for you, ensuring you claim all legitimate expenses.
Submit your disclosure within 90 days
Using your disclosure reference, submit your full breakdown of income, expenses, tax owed, interest, and penalties. Pay what you owe. Keep all supporting documents for at least 6 years after submission.
Need help? We handle the calculations and paperwork. You provide the facts, we do the rest.
Get Help With Your DisclosureUnderstanding the Penalties
HMRC penalties depend on two factors: your behaviour (was it a genuine mistake or deliberate?) and who made first contact (did you come forward, or did HMRC find you?).
| Behaviour | You Come Forward First | HMRC Contacts You First |
|---|---|---|
| Careless (reasonable care not taken) | 0-30% | 15-30% |
| Deliberate (knew but didn't declare) | 20-70% | 35-70% |
| Deliberate + concealed | 30-100% | 50-100% |
K&R's take: The message is clear - coming forward before HMRC contacts you always results in lower penalties. We've helped many landlords navigate this process with the lowest possible penalties.
How Far Back Can HMRC Investigate?
Genuine Mistakes
You made an honest error and took reasonable care with your tax affairs.
Careless Errors
You should have known better - lack of reasonable care in your tax affairs.
Deliberate Concealment
You deliberately hid income from HMRC. This is rare but carries the heaviest consequences.
Most Let Property Campaign disclosures we handle cover 4-6 years. The 20-year rule only applies if HMRC suspects intentional tax evasion.
The Mortgage Interest Trap
Common misconception: "My rent just covers the mortgage, so there's no profit to tax."
Reality: Only mortgage interest counts as an expense, not capital repayments. If your monthly payment is £1,000 and £400 is interest, only £400 is deductible.
Section 24 changes: Since 2020/21, individual landlords can only claim a 20% tax credit for mortgage interest - not a full deduction. This has pushed many landlords into higher tax brackets and created unexpected tax bills.
K&R's take: This is why professional calculation matters. We ensure you claim the correct mortgage interest relief and all other allowable expenses - reducing your tax bill as much as legally possible.
What Happens If You Don't Come Forward?
HMRC's Connect System
HMRC cross-references data from Land Registry, banks, letting agents, Airbnb, and overseas tax authorities. They're finding more undeclared landlords every year.
Higher Penalties
If HMRC finds you first, you're looking at 15-100% penalties instead of 0-30%. Plus interest on the unpaid tax for all the years you owed it.
Criminal Prosecution (Serious Cases)
In cases of deliberate and significant tax evasion, HMRC can pursue criminal prosecution. This is rare but the consequences are severe.
Common Questions About the Let Property Campaign
How do I make a Let Property Campaign disclosure?
First, ensure you have a UTR number (register at gov.uk/register-for-self-assessment if needed). Then notify HMRC through the Digital Disclosure Service that you intend to make a disclosure. You'll receive a reference number and have 90 days to calculate what you owe and submit your full disclosure with payment.
What penalties will I pay for undeclared rental income?
Penalties depend on your behaviour: 0-30% for careless errors if you come forward voluntarily (unprompted), 15-30% if HMRC contacts you first (prompted). For deliberate non-disclosure, penalties range from 20-70% (unprompted) to 35-70% (prompted). Deliberate concealment can reach 30-100%. Coming forward before HMRC contacts you always results in lower penalties.
Do I need a UTR number for the Let Property Campaign?
Yes, if you've never filed Self Assessment before. Register online at gov.uk/register-for-self-assessment. Your UTR (Unique Taxpayer Reference) arrives by post within 10 working days (21 days if abroad). You need this before you can notify HMRC of your intention to disclose.
What expenses can I claim on rental income?
Allowable expenses include letting agent fees, buildings and contents insurance, maintenance and repairs (not improvements), ground rent and service charges, accountancy fees, legal costs for evictions or lease renewals, and advertising for tenants. Mortgage interest is handled separately - individuals get a 20% tax credit, while companies can deduct it fully.
How far back can HMRC investigate rental income?
It depends on the nature of the error: 4 years for genuine mistakes, 6 years for careless errors (where you should have known better), and up to 20 years for deliberate concealment. Most Let Property Campaign disclosures cover 4-6 years unless there's evidence of intentional tax evasion.
What if I've already received a letter from HMRC?
If HMRC has already contacted you, this is a "prompted" disclosure and penalties will be higher (15-30% minimum vs 0-30% for unprompted). However, cooperating fully can still reduce penalties. Contact us immediately - time is critical and we can help you respond correctly.
What is the mortgage interest trap landlords fall into?
Many landlords assume "rent covers mortgage = no profit = no tax." This is wrong. Only mortgage interest counts as an expense, not capital repayments. Since the Section 24 changes (fully in place from 2020/21), individual landlords can only claim a 20% tax credit for mortgage interest, not a full deduction. This pushes many into higher tax brackets.
How long do I have to complete the disclosure?
Once you notify HMRC through the Digital Disclosure Service, you have 90 days to calculate what you owe, gather supporting documents, and submit your full disclosure with payment. Extensions are possible in complex cases but must be agreed with HMRC in advance.
Ready to Sort Out Your Tax?
We've helped many landlords make successful disclosures with minimum penalties. You give us the facts, we handle the calculations and paperwork.
Our Fee
£250 per tax year
Includes calculation, paperwork, and submission to HMRC
Or call us on 01782 499140
Related Resources:
Official HMRC guidance: Let Property Campaign: your guide to making a disclosure