HMRC Let Property Campaign: What You Need to Know

HMRC's Let Property Campaign is a last-chance amnesty for undeclared rent: you go to them first, come clean, and in return you get lower penalties and a much smaller risk of criminal trouble.

"This guide provides general information about UK landlord tax obligations. It is not financial or legal advice. Tax treatment depends on your individual circumstances and may change. Consider consulting a qualified accountant or solicitor for advice specific to your situation."

1. What the Let Property Campaign is and who HMRC are going after

HMRC's Let Property Campaign (LPC) is a permanent disclosure facility for anyone who has under-declared or never declared UK rental income.

• You tell HMRC you want to use the campaign.
• They give you 90 days to calculate all the tax, interest, and penalties and make a full disclosure and payment.

HMRC is leaning on it hard:

Professional summaries put extra tax collected at around GBP 107m in 2024-25, roughly double three years earlier, off the back of more landlord data-matching.

Who they target, using the Connect system and bulk data:

• Land Registry / SDLT -- you bought property but never show rent.
• Tenancy deposit schemes -- live tenancies against people with no declared rental income.
• Letting agents -- agents submit annual returns of rents they handle.
• Mortgage lenders -- BTL/let-to-buy mortgages with no rental on your tax record.
• Banks -- rental-looking deposits into accounts.
• Platforms -- Airbnb-type sites now share data on hosts above certain thresholds.

If you have undeclared rent and think you are under the radar, you are probably not.

2. How HMRC penalties work: careless vs deliberate, prompted vs unprompted

Penalty rules come from Finance Act 2007 Sch 24 and HMRC factsheets like CC/FS7A and CC/FS9.

Behaviour bands

• Careless / non-deliberate -- you did not take reasonable care (eg assumed agent "sorted the tax", or misunderstood rules).
• Deliberate -- you knew rent was taxable and chose not to declare or understated on purpose.
• Deliberate and concealed -- plus steps to hide it (fake documents, offshore accounts to mask rent, etc.).

Penalty ranges under LPC

Key points:

• Unprompted means HMRC have not yet opened an enquiry or written to you specifically. Generic "nudge" letters about landlords in general still count as unprompted if you move quickly.
• Within the range, HMRC reduce penalties if you:
• Tell them everything quickly.
• Help them understand it.
• Give full access to records.

Time limits (Taxes Management Act 1970 ss29 and 36)

• Up to 4 years back for genuinely innocent errors.
• Up to 6 years for careless behaviour.
• Up to 20 years for deliberate under-declarations.

So if you have been "forgetting" rent for a decade and knew it was taxable, HMRC can and will look back most of that period.

If you sit tight and HMRC finds you first:

• You lose unprompted status. Penalty ranges jump, especially for deliberate cases.
• In serious cases with badges of fraud, they can consider Code of Practice 9 / criminal investigation, though most LPC cases are handled civilly.

3. How to make a Let Property Campaign disclosure, step by step

HMRC's own LPC guidance sets out a simple sequence:

Step 1: Notify HMRC you want to use LPC

• Use the online disclosure service or by phone, telling them you are a landlord with undeclared property income.
• HMRC acknowledge and give you a Disclosure Reference Number and Payment Reference Number.

Step 2: You get 90 days

From HMRC's acknowledgement, you have 90 days to:

• Pull together all historic rental income and allowable expenses (going back as far as required -- up to 20 years depending on behaviour).
• Work out the extra tax due for each year.
• Calculate interest on late paid tax.
• Propose a penalty percentage that fits your behaviour (careless vs deliberate, unprompted).

Step 3: Make the disclosure

• Submit your disclosure via HMRC's system or on the LPC disclosure form, year by year.
• Include a narrative explaining what went wrong (eg "careless, misunderstood rules, no previous history"). HMRC heavily weight this when setting penalties.

Step 4: Pay

• Pay the total of tax + interest + penalty by the LPC deadline.
• If you cannot pay in full, you must contact HMRC before the deadline and agree a Time to Pay arrangement.

If HMRC accept your disclosure, they will normally draw a line under the past for those issues, as long as you stay compliant going forward.

4. What a landlord with undeclared rent should do right now

If you have never declared rental income (or have understated it), the safest play is:

Stop burying your head in the sand

• Assume HMRC either already have you on a list or will soon. Land Registry, deposit schemes and letting agents feed directly into their systems.

Get the numbers in order before you contact HMRC

• List every property you have let, with:
• Dates let by tax year.
• Rents received by tax year (bank statements help).
• Allowable expenses (repairs, insurance, agents, etc.).
• Work out a rough profit per year before you even talk penalties.

Decide honestly: careless or deliberate?

• If you genuinely did not understand you had to declare, or thought a letting agent did it for you, you are in careless territory.
• If you knew perfectly well and chose not to declare, that is deliberate. Call it what it is. HMRC will look at behaviour plus how long you left it.

Notify HMRC under the Let Property Campaign

• Use the LPC online or phone route, not the generic helpline.
• Once HMRC give you the 90-day window, you are "in the process" and can focus on accurate totals rather than worrying about a raid.

Either use a landlord-literate accountant or follow LPC guidance line-by-line

• HMRC's LPC guide and CC/FS7A explain how to classify your behaviour and how to propose a penalty within the bands.
• A decent accountant will often pay for themselves in reduced penalties and avoiding stupid errors in your disclosure.

Fix your structure going forward

• Register for Self Assessment if you are not already.
• Start keeping proper records and budgeting for 20-40% tax on profit plus Section 24, so you do not end up back here in three years.

Doing nothing is the riskiest approach: if HMRC open an enquiry or send you a targeted letter before you act, you lose the best penalty deals and any chance of presenting this as a genuine voluntary clean-up.

5. What forums get wrong about the Let Property Campaign

Typical bad advice and myths:

"If HMRC have not contacted you yet, just wait -- the campaign is for other people." In reality LPC is designed for people like you; waiting until HMRC writes almost guarantees prompted penalties and a more hostile starting point.

"It is only for small accidental landlords." HMRC explicitly say it applies to anyone from one lodger above the thresholds to multi-property portfolios that have been under-declared.

"They will only look back six years." They can go back 4, 6 or 20 years depending on behaviour; if you admit deliberate non-declaration, 20 years is on the table under TMA 1970 s36.

"Using the campaign paints a target on your back." HMRC's own messaging is the opposite: they encourage LPC use and reserve harsher penalties and criminal routes for those who ignore it and are later caught by data-matching.

"Just declare from this year forward, HMRC will not care about the past." Starting to declare now without addressing historic years is more a confession than a fix; your new returns flag the gap and give HMRC a neat enquiry window.

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