HMRC Let Property Campaign 2026: How to Disclose Undeclared Rental Income

If you have undeclared rental income sitting in your tax affairs, the HMRC Let Property Campaign is almost certainly the best route to getting straight. Launched in 2013 and still running in 2026, it is HMRC's targeted voluntary disclosure scheme for UK landlords who have not fully reported income from residential lettings. Getting ahead of an investigation can mean the difference between a modest penalty and a criminal prosecution.

What Is the Let Property Campaign?

The Let Property Campaign (LPC) is an HMRC disclosure facility aimed specifically at residential landlords. It covers income from:

• Single or multiple buy-to-let properties
• Rooms let within your own home (beyond the Rent a Room £7,500 exemption)
• Holiday lets in the UK and abroad
• Accidental landlords who inherited or acquired a property and started renting without registering for Self Assessment

It does not cover commercial property lettings, which fall under a separate Business Tax Disclosure Opportunity.

Why Disclose Now?

HMRC has significantly improved its data-matching capabilities. Information from letting agents, land registry sales, mortgage interest relief claims, tenancy deposit schemes, and Airbnb-style platforms is now routinely cross-referenced against Self Assessment records. If HMRC opens an investigation into you before you come forward, the penalty regime becomes substantially harsher.

There is also the Requirement to Correct, which placed an obligation on UK taxpayers with offshore non-compliance to put matters right. Landlords with overseas rental properties who have not disclosed face HMRC penalties on top of offshore surcharges.

Penalty Ranges: Prompted vs Unprompted

This is the most important factor in deciding to act quickly.

Unprompted disclosure -- you contact HMRC before they contact you:

• Deliberate and concealed: 30% to 100% of unpaid tax
• Deliberate but not concealed: 20% to 70%
• Careless: 0% to 30%
• Reasonable care (genuine mistake): 0%

Prompted disclosure -- HMRC contacts you first:

• Deliberate and concealed: 50% to 200% (or higher for offshore)
• Deliberate but not concealed: 35% to 70%
• Careless: 15% to 30%

The difference between "careless" and "deliberate" can hinge on whether you knew you had a filing obligation. If you have been renting out property for years and never registered for Self Assessment, HMRC will often treat that as at least careless. However, genuine first-time landlords who were unaware of the rules can sometimes negotiate the lower end of the careless band.

The Disclosure Process Step by Step

1. Notify HMRC -- Go to the HMRC LPC online service and register your intention to disclose. You will get a disclosure reference number.
2. Calculate what you owe -- Work out undeclared rental profits for each relevant tax year, going back up to 20 years for deliberate errors, or 6 years for careless ones. Allowable deductions include mortgage interest (restricted to 20% tax credit for residential landlords since 2020), letting agent fees, repairs and maintenance, buildings insurance, and professional fees.
3. Submit your disclosure -- File the completed disclosure form with the full calculation online.
4. Pay -- HMRC expects payment within 90 days of your disclosure reference number being issued. Interest applies from the original due date.

Interest on Unpaid Tax

HMRC charges late payment interest at 7.5% per annum (the Bank of England base rate plus 2.5 percentage points as of 2026/27). This applies from the date the original tax was due, so a disclosure going back five or six years can carry a meaningful interest bill on top of the underlying tax and any penalty.

Reasonable Excuse and Mitigation

You can argue your penalty should be reduced or eliminated if you had a reasonable excuse -- for example, a serious illness, bereavement, or genuinely relying on incorrect professional advice. Mitigation is also available for the quality of disclosure: how much you told HMRC, how helpful you were, and whether you came forward voluntarily. Each of these factors -- telling, helping, and giving -- can reduce a penalty within the applicable range.

Prosecution Risk

HMRC does prosecute landlords in egregious cases, particularly where there is evidence of deliberate concealment, false records, or large sums involved. Successful prosecution can result in a criminal record, fines, and imprisonment. Voluntary disclosure before investigation starts effectively takes prosecution off the table for most cases.

What If You Cannot Afford to Pay?

HMRC's Time to Pay service allows you to spread liability over an agreed period. You will still pay interest, but a structured payment arrangement is far preferable to ignoring the debt. Contact HMRC before the 90-day window closes.

If you have undeclared rental income, the clock is ticking every day that HMRC's data-matching systems improve. Coming forward now, while disclosure is unprompted, keeps you in the lowest possible penalty band.

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Use our UK Tax Calculator to estimate how much income tax your rental profits add to your bill, and our Rental Yield Calculator to model your net returns after tax.