If you have let residential property and not told HMRC about the profit, the Let Property Campaign is HMRC's route for putting it right. You notify HMRC first, and then have 90 days to calculate and settle the tax, interest and any penalty. Coming forward before HMRC contacts you usually means a much smaller penalty, and for someone who simply did not realise they had to declare, it can be between 0% and 10% of the tax.
How people end up here
Most landlords in this position became landlords almost by accident. HMRC's own case studies read like a list of ordinary life events:
- moving in with a partner and letting your flat rather than selling it, on the basis that the rent only covers the mortgage;
- inheriting a house and letting it through an agent;
- moving for work, or into a care home, and letting the old home;
- letting a room in your own home for more than the £7,500 rent-a-room limit;
- moving abroad and letting your UK home, without realising UK tax still applies (see our guide for non-resident landlords).
A common trap is assuming there is no profit because the rent matches the mortgage payment. Only the interest part of a mortgage counts, and since 2020/21 it gives relief only as a 20% tax credit, not as a deduction (before 2017/18 it was deducted in full, with a phased change in between, which matters for older years in a disclosure). So a let that feels break-even often produces a taxable profit.
Who can use the Let Property Campaign
The campaign is for individual landlords letting residential property, in the UK or overseas: one flat or a portfolio, holiday lets, inherited property, a room above the rent-a-room threshold, or UK property let while living abroad. Executors can use it for a landlord who has passed away.
It is not for companies or trusts, and not for commercial property such as a shop or garage. Each person discloses separately, so a couple who own a let property jointly each make their own disclosure of their share.
Before assuming tax is due, check the allowances. Rent-a-room relief makes up to £7,500 a year tax-free when you let furnished space in your own home (£3,750 each if the income is shared). For other lets, the £1,000 property allowance covers small gross income, but it cannot be combined with the mortgage interest credit and did not exist before 2017/18. A year with a rental loss has no tax to disclose, and the loss carries forward against later rental profits.
How the process works
- Notify. You, or an Advisor acting for you, tell HMRC online that a disclosure is coming. No figures are needed at this stage. HMRC issues a disclosure reference and a payment reference.
- Calculate. For each year, work out rent received, allowable expenses and the tax due, then add interest and the penalty. You assess the penalty yourself, using HMRC's factsheets. If records are missing, a reasoned estimate is acceptable, but keep your workings.
- Disclose and pay within 90 days of HMRC acknowledging your notification. If you cannot pay in full, call the helpline to agree an arrangement before you submit (see HMRC Time to Pay).
- Acceptance. HMRC checks the disclosure and, if satisfied, accepts your offer in writing. Your offer and that letter form a legally binding contract.
The disclosure must be complete, so other untaxed income or gains, such as a gain on selling a property or shares, go in too. Income for the current tax year is left out, and the previous year goes on a normal tax return. Today that means 2026/27 is excluded and 2025/26 belongs on a return due by 31 January 2027, so the disclosure itself covers 2024/25 and earlier. The deadline to register for Self Assessment for 2025/26 was 5 October 2026, so if you have not registered, do it now: if the tax for that year is paid by 31 January 2027, no penalty for late registration should arise.
How far back, and what it costs
The number of years depends on why the income went undeclared:
| Your position | Years HMRC can go back | Penalty range if you come forward first |
|---|---|---|
| Registered and took reasonable care, still underpaid | Up to 4 years | No penalty |
| Registered but careless | Up to 6 years | 0% to 30% |
| Never told HMRC, not deliberate | Up to 20 years | 0% to 30% (10% minimum once over 12 months late) |
| Deliberate | Up to 20 years | 20% to 70% |
| Deliberate and concealed | Up to 20 years | 30% to 100% |
The 20-year limit for anyone who never registered surprises people, but it is in the legislation. In practice you go back to the year the letting first produced taxable income. Penalties are a percentage of the extra tax. Where the property is overseas, the penalty can go up to 200% depending on the country, and where an offshore matter is involved HMRC can go back up to 12 years even without deliberate behaviour, for 2015/16 onwards, and for 2014/15 where you were careless (until 5 April 2027).
Interest runs on each year's tax from its original due date until payment, currently at 7.75% a year (Bank of England base rate plus 4%). And if you have delayed coming forward for 3 years or more, HMRC will usually set the penalty at least 10 percentage points above the minimum.
Prompted or unprompted: why timing matters
A disclosure is unprompted only if you had no reason to believe HMRC had found, or was about to find, the problem. A general campaign does not make your disclosure prompted. A letter opening a compliance check, or a question about your property income, does, and the minimum penalties then rise: for example, 20% rather than 10% for an older non-deliberate failure, and 35% rather than 20% for deliberate behaviour. HMRC is also unlikely to accept a campaign disclosure once it has told you it is opening an enquiry; you deal with the officer instead.
HMRC's information keeps growing. It can require bulk data from anyone who receives money on behalf of someone else, which includes letting agents collecting rent. Since 1 January 2024, short-let and other online platforms report hosts' income and each property's address (see what HMRC now sees from platforms). HMRC uses what it receives to spot people who should have come forward, and may write to them. If a letter arrives, take advice before replying.
A worked example
Hannah moved in with her partner in April 2023 and let her flat for £1,250 a month: £15,000 a year. Agent fees, insurance and repairs come to £3,000 and mortgage interest to £4,000. She lives in England and her salary is £34,000, so she stays a basic rate taxpayer. (A Scottish taxpayer would pay Scottish rates on the rental profit, although the mortgage interest credit stays at 20%.) She never registered for Self Assessment, but did not set out to hide anything.
- Rental profit: £15,000 less £3,000 = £12,000 (mortgage interest is not deducted).
- Tax at 20%: £2,400, less the 20% credit on £4,000 of interest (£800) = £1,600 a year.
- Disclosure covers 2023/24 and 2024/25: £3,200 of tax.
- Penalty, assuming she notifies now and gives full help: 2023/24 is more than 12 months overdue, so 10% (£160); 2024/25 is less than 12 months overdue, so 0%. Total £160.
- Interest, if paid at the end of December 2026 and the rate is unchanged: about £350.
Her total is roughly £3,710, plus tax on 2025/26 through a normal return. Had HMRC written to her first, the minimum penalties would have been 20% and 10%, or £480.
Other routes
The campaign is designed for people whose undeclared income is mainly residential rent. If the bigger problem is something else, such as an unregistered business, HMRC's general Digital Disclosure Service route is used instead, with the same 90-day structure. Where overseas income, assets or bank accounts are involved beyond the letting, HMRC's Worldwide Disclosure Facility, part of the same online service, may be the right channel. Rental income from a property abroad can go through the campaign, selecting the offshore option.
What to do now
- List every property you have let, when the letting started and who owns what share.
- Gather tenancy agreements, agent statements, mortgage statements and bank statements; ask your bank for copies of missing ones now.
- Check whether rent-a-room relief or the property allowance means nothing was ever due.
- Be honest with yourself about behaviour: it decides how many years and what penalty.
- Notify HMRC before it contacts you, then use the 90 days to prepare an accurate disclosure. Our guide to landlord allowable expenses will help you avoid overpaying.
- If HMRC has already written, do not ignore it: we can deal with HMRC for you.
We handle Let Property Campaign disclosures from notification through to HMRC's acceptance letter. Book a consultation and we will tell you where you stand.
This article is general information about UK tax, based on the law and HMRC practice at the date shown above. It is not advice, and reading it does not make you our client. Tax rules change and their effect depends on your circumstances, so please speak to us before acting on it.