If you've been letting out a property and haven't told HMRC about the income, you're not alone, and you're not stuck. HMRC runs a route designed for exactly this situation. It's called the Let Property Campaign, and it lets residential landlords put things right with lower penalties than if HMRC catches up with you first.
This guide explains who the campaign is for, how the two-step process works, the 90-day clock you'll be working to, and how penalties are worked out. We'll walk through an illustrative example so you can see what a disclosure might actually look like in numbers.
It's written for individual landlords in England, Wales and Northern Ireland who have undeclared rental profits and want to sort them out properly. If that's you, read on, and don't panic. Coming forward voluntarily is almost always the cheaper and calmer option.
What is the Let Property Campaign?
The Let Property Campaign is an HMRC scheme that gives landlords a way to tell HMRC about rental income they should have declared but didn't. You make a voluntary disclosure, pay what you owe plus interest and a penalty, and you're back on the right side of the rules.
The key word is voluntary. Because you're coming forward yourself rather than waiting to be caught, the penalty on the unpaid tax is usually lower. HMRC's own guidance puts it plainly: the penalties "will usually be lower if you make a voluntary disclosure."
There's no fixed end date for the campaign, so you can use it now. But the protection of a low, voluntary-disclosure penalty only applies while HMRC hasn't already opened an enquiry into you. Once a letter lands asking about your lettings, the favourable terms can fall away.
Who can use the Let Property Campaign?
The campaign is built for individuals who let out residential property, including if you:
- let a single property or a whole portfolio
- rent out a room for more than the Rent a Room tax-free allowance
- let a holiday home, even if you also use it yourself
- inherited a property and let it out
- live abroad but let a property in the UK, or live in the UK and let a property overseas
It is not the right route for everyone. You cannot use the Let Property Campaign if you're letting commercial property such as a shop, garage or lock-up, or if you need to disclose on behalf of a company or a trust. Those situations use different disclosure routes.
If you're a furnished holiday let owner, the rules around that have changed in recent years, so it's worth getting advice on how your lettings should be reported before you disclose. Our accountants for landlords deal with this every week.
How does the disclosure process work?
There are two steps, and they happen in order.
Step 1: Notify HMRC. You tell HMRC that you intend to make a disclosure. HMRC then writes to you with a unique disclosure reference number. You'll use this on everything that follows.
Step 2: Disclose and pay. Once you have your reference number, you work out everything you owe, submit your disclosure, and pay. You must do this within 90 days of the date HMRC acknowledges your notification.
That 90-day window is the part landlords most often underestimate. Pulling together several years of rent statements, mortgage paperwork, agent fees and repair invoices takes time, so start gathering records the moment you notify, not on day 80.
A word on penalties: because this is a disclosure, you calculate the penalty yourself rather than waiting for an HMRC officer to set it. HMRC's guidance is explicit that "it is you (rather than a compliance officer) who must consider and calculate any penalties." Getting that calculation right matters, which is one reason many landlords ask an accountant to handle it.
If you genuinely can't pay the full amount by the deadline, don't just submit and hope. HMRC's guidance says to speak to them first, because a Time to Pay arrangement may be possible if you contact them before you submit.
How many years do I need to go back?
How far back you must disclose depends entirely on why the income went undeclared. HMRC applies different limits for different behaviour:
| Your situation | Years to disclose |
|---|---|
| You took reasonable care but still got it wrong | up to 4 years |
| You were careless (didn't take reasonable care) | up to 6 years |
| You deliberately didn't declare the income | up to 20 years |
| You failed to notify HMRC that you had letting income | up to 20 years |
Source: HMRC, Let Property Campaign guidance.
Being honest with yourself about which row you sit in is important. If you simply didn't realise rental profit was taxable, that's different from knowing and choosing not to tell HMRC. The behaviour you (and HMRC) agree on drives both the number of years and the penalty rate.
How are the penalties worked out?
The penalty is a percentage of the tax you underpaid, and it sits on top of the tax itself plus interest.
For income or gains that arose in the UK, the penalty can be up to 100% of the tax due. For an offshore liability it can be up to 200%. Those are the ceilings, not what a cooperative landlord typically pays.
The percentage within that range depends on three things:
- Your behaviour. Reasonable care, careless, or deliberate. Deliberate sits at the top of the scale.
- Whether the disclosure was prompted or unprompted. Coming forward before HMRC contacts you (unprompted) earns a bigger reduction than disclosing only after they've made contact (prompted).
- The quality of your disclosure. Telling HMRC everything, helping them understand it, and giving them access to records all reduce the penalty.
This is exactly why the Let Property Campaign exists. An unprompted disclosure where you've taken reasonable care can attract a much smaller penalty than the headline 100%, sometimes nil for the reasonable-care, in-time cases. Leave it until HMRC writes to you, and the same income can cost far more.
Interest is charged separately on the late-paid tax, running daily from the date each year's tax was originally due until you pay.
How do I work out the tax I owe?
Rental profit is taxed as part of your income for the year. You add it to your other income (salary, self-employment, pension) and it's taxed at your marginal rate. For 2025/26 the rates for England, Wales and Northern Ireland are 20% basic, 40% higher and 45% additional, with the higher rate starting once total income passes £50,270. Source: gov.uk. Scotland sets its own bands.
To get to taxable profit, you take your rental income and deduct allowable expenses, which include letting agents' fees, accountants' fees, landlord insurance, repairs and maintenance, utility bills you pay, Council Tax and ground rent. You can't deduct the cost of buying the property or major improvements; those are capital, not running costs.
Two things catch landlords out:
- The property allowance. The first £1,000 of property income is tax-free. Source: gov.uk. If your income is below that, you may have nothing to declare. If it's above, you can either deduct your actual expenses or claim the £1,000 allowance instead, whichever helps more.
- Mortgage interest. Individual landlords can no longer deduct mortgage interest as an expense. Instead you get a tax reduction worth 20% of the finance costs. Source: gov.uk. That's a credit against your tax bill, not a deduction from profit, which is a meaningful difference for higher-rate taxpayers.
Our self-assessment service rebuilds these figures year by year so the disclosure stands up to scrutiny.
Illustrative example: disclosing two years of rent
Illustrative example. Daniel is a higher-rate taxpayer with a £55,000 salary. He let a flat for two tax years, 2023/24 and 2024/25, and didn't declare the rent. He's a careless case, not deliberate, so he goes back and discloses both years.
Each year the flat brought in £14,400 of rent. His allowable running costs (agent fees, insurance, repairs, Council Tax during voids) came to £3,400 a year. He also paid mortgage interest of £4,000 a year.
His taxable rental profit each year is £14,400 minus £3,400, which is £11,000. Because his salary already uses up his personal allowance and sits in the higher-rate band, the rental profit is taxed at 40%:
- £11,000 profit at 40% = £4,400 tax before the mortgage relief.
He then claims the mortgage interest tax reduction, worth 20% of his £4,000 finance costs:
- £4,000 at 20% = £800 reduction.
So the rental tax for each year is £4,400 minus £800, which is £3,600. Across two years that's £7,200 of tax. On top of that he'll owe interest for late payment, plus a penalty set as a percentage of the £7,200, lower because he came forward voluntarily and cooperated fully.
The figures here are illustrative and use 2025/26 rates and rules to show the method. Your own years may use the rates for each relevant year, so the actual numbers will differ. To sense-check your own position, our income tax calculator is a quick starting point.
What happens if I do nothing?
HMRC has more data on landlords than ever, including information from letting agents, the Land Registry, the tenancy deposit schemes and overseas tax authorities. If they spot undeclared income before you disclose, the campaign's favourable terms generally no longer apply.
The practical results of being caught rather than coming forward are higher penalties, because the disclosure is then prompted rather than voluntary, and in serious deliberate cases the risk of criminal prosecution. HMRC's own guidance warns that if you don't disclose now and HMRC finds out later, "you could get higher penalties or face criminal prosecution."
The calm, cheaper path is almost always to disclose first. The numbers usually work out better, and so does the stress.
Want help making a Let Property Campaign disclosure?
Disclosures reward accuracy. Get the years, the expenses and the penalty calculation right, and you keep the cost down. Get them wrong and you can pay more than you needed to, or open the door to an enquiry. Book a free 20-minute call with a Zmartly accountant and we'll tell you where you stand before you notify HMRC. Talk to a Zmartly tax adviser.
FAQs
Is the Let Property Campaign still open?
Yes. There's no announced closing date, so landlords can still use it. The catch is that the favourable, voluntary-disclosure terms only protect you while HMRC hasn't already opened an enquiry into your lettings. Once that happens, the campaign's lower penalties may no longer be available, so coming forward sooner is better.
How long do I have to make my disclosure?
You have 90 days from the date HMRC acknowledges your notification. You first notify HMRC of your intention to disclose, HMRC sends you a unique disclosure reference number, and then the 90-day clock runs for you to submit the full disclosure and pay.
Will I get a penalty if I come forward voluntarily?
Usually yes, but a lower one. Penalties are a percentage of the unpaid tax and depend on your behaviour and whether the disclosure is prompted or unprompted. UK liabilities can be penalised up to 100% of the tax, but an unprompted disclosure where you took reasonable care can attract a much smaller penalty, sometimes nil. Coming forward and cooperating is what cuts the rate.
Do I have to pay everything in one go?
Payment is normally due when you submit your disclosure. If you can't pay it all at once, HMRC's guidance is to contact them before you submit, because a Time to Pay arrangement may be possible. Don't submit and simply hope to sort the money out later.
Can I use the campaign for a commercial property or my company's lettings?
No. The Let Property Campaign is for individuals letting residential property. You can't use it for commercial property such as shops or lock-ups, or to disclose on behalf of a company or trust. Those need a different disclosure route, and we can point you to the right one.
