If you’re a landlord with untaxed rental income that hasn’t been reported to HMRC, the danger is penalties and even court proceedings. Fortunately, the HMRC Let Property Campaign is an opportunity for landlords to disclose undeclared rental income and get their tax affairs in order at reduced penalties. Understanding how this campaign operates will keep you compliant and avoid unwanted financial expense.
What is the HMRC Let Property Campaign?
The HMRC Let Property Campaign is a voluntary disclosure campaign that allows landlords to come forward voluntarily to report previously untaxed rental profits. The campaign is aimed at individuals who let residential property within the UK or abroad and have not reported all their income to HMRC.
Voluntary disclosure will lead to lower penalties than if HMRC were to discover the non-compliance as a result of an investigation.
Who Can Participate in the Let Property Campaign?
The campaign is for landlords who:
- Let a single or multiple residential properties that they own
- Let second homes in the UK or overseas
- Let property while overseas as a non-resident landlord
- Let a room in their home for more than the tax-free amount (£7,500 under the Rent a Room Scheme)
- Have inherited a property with rental income
Why Should Landlords Report Rental Income?
Failure to report rental income can result in severe financial sanctions, including:
Serious penalties – Up to 100% of unpaid tax or higher if HMRC concludes there has been intentional non-compliance.
Interest on unpaid tax – HMRC charges interest on unpaid tax amounts.
Potential legal action – HMRC can take landlords to court who fail to report rental income.
With the use of the Let Property Campaign, landlords need not fear penalties and can simply pay their taxes with less of a headache.
How to Disclosure Through the Let Property Campaign
In making a disclosure for unpaid rental income via the Let Property Campaign, see the steps below:
Notify HMRC – Indicate to HMRC your plans to make disclosure for undeclared rental income.
Get Financial Records – Get records of rental receipts, expenditures, and previous years’ tax returns to determine the amount payable.
Utilise HMRC’s Digital Disclosure Service (DDS) – Enter details of your rental income and calculate the tax payable.
Pay the Amount Due – Pay the amount due within the time frame that has been agreed upon.
Get Confirmation – After HMRC processes and clears the disclosure, your tax will be paid.
How to Reduce Your Tax Liability as a Landlord
Landlords can reduce their tax liability when declaring rental income by claiming allowable expenses such as:
- Mortgage interest (where permitted under current tax rules)
- Letting agent fees and property management charges
- Maintenance and repair expenses
- Insurance premiums (landlord insurance, building insurance)
- Council tax and utility bills (where paid by the landlord)
Get Professional Advice with Your Disclosure of Rental Income
Disclosure of tax can be complex, and mistakes cost you. UK Property Accountants excel at helping landlords comply with tax, prevent penalties, and maximise tax efficiency.
If you hold untaxed rental income, take advantage of the Let Property Campaign today and avoid unwarranted penalties. Contact UK Property Accountants for expert advice and a hassle-free disclosure procedure.