Let Property Campaign: Voluntary Landlord Disclosure Guide

The Let Property Campaign has been open since 2013 with no announced end date. It is HMRC’s principal disclosure route for residential landlords who have not correctly reported rental income — whether through deliberate omission, honest misunderstanding, or simple administrative neglect. What has changed in recent years is not the campaign itself but the volume and speed with which HMRC is identifying candidates for it.

HMRC’s Connect system draws on data from more than 60 government and third-party sources: rental platforms, letting agent records, mortgage data, bank account information, Land Registry ownership records, and PAYE and self-assessment filings. A landlord whose name appears on a mortgage, whose letting agent pays rent into their bank account, and who has not submitted a self-assessment return is a candidate HMRC can identify without any manual investigation. The nudge letters that follow are the first step in a process that ends either in a voluntary disclosure or an HMRC enquiry — and voluntary disclosure is always the more favourable route.

Who the Campaign Is For

The Let Property Campaign is for UK-based landlords who have rental income that has not been fully reported to HMRC. This includes: landlords with residential properties who have not submitted self-assessment returns; landlords who have submitted returns but omitted some or all of their rental income; accidental landlords who moved in with a partner and rented out their former home without realising a tax liability arose; and landlords with properties overseas who are UK tax resident and have not reported the foreign rental income.

Common situations that generate undisclosed income include: the mortgage interest misconception (many landlords believe they can deduct their full mortgage payment, whereas since 2020 only a 20% basic rate credit is available on finance costs); the Rent a Room scheme misapplication (the £7,500 exemption only applies where the landlord also lives in the property); and overseas property (UK tax-resident landlords must report foreign rental income in the UK regardless of local taxes paid).

For practices, the most important diagnostic question for any client who owns residential property is: are they reporting all rental income correctly? With HMRC’s detection capability as it currently stands, the assumption that undisclosed income will not be identified is no longer viable.

How the Disclosure Process Works

The Let Property Campaign follows a defined sequence. The landlord notifies HMRC of the intention to disclose — this can be done online through HMRC’s campaign portal and does not require detailed calculations at this stage, simply notification of intent. HMRC then issues a unique Disclosure Reference Number and the landlord has 90 days to complete the full disclosure: calculating the rental profits for all relevant years, quantifying the tax owed, calculating interest, and assessing any penalty.

The lookback period depends on behaviour. Where the failure to declare income was down to taking reasonable care — a genuine misunderstanding rather than deliberate omission — the lookback is four years. Where the failure was careless, it extends to six years. For deliberate non-disclosure, HMRC can go back up to 20 years, though this is rare in the context of the Let Property Campaign where the disclosed behaviour is typically careless rather than deliberate.

Payment of the full amount is expected when the disclosure is submitted. Where the landlord cannot pay immediately, HMRC can agree a payment plan through the Let Property Campaign helpline — but this should be arranged proactively, not assumed.

Penalty Rates and Why Timing Matters

Voluntary disclosure through the Let Property Campaign typically produces significantly lower penalties than a disclosure made after HMRC initiates contact. For careless errors disclosed voluntarily, HMRC will often apply a zero penalty where the disclosure quality is high — meaning the landlord told HMRC fully, helped with the assessment, and provided full access to records. Even where a penalty does apply, voluntary unprompted disclosure attracts a maximum penalty rate of 30% for careless behaviour, compared to up to 45% for prompted disclosure and higher rates for deliberate non-compliance.

For practices advising clients who have received a nudge letter, the disclosure has already moved from “unprompted” to “prompted” in HMRC’s terminology — which affects the penalty range. Even so, a full and cooperative disclosure through the Let Property Campaign following a nudge letter will produce a better outcome than ignoring the letter and waiting for a formal enquiry.

The practical advice for practices is: identify any clients who own residential property and have not been declaring rental income, and raise the Let Property Campaign with them now — before HMRC makes contact — to preserve the unprompted disclosure status and the lowest possible penalty outcome.

Calculating Rental Profits Correctly Going Forward

One of the outcomes of a Let Property Campaign disclosure is that the landlord must commit to correct reporting going forward. For practices, this means ensuring the self-assessment return for future years accurately captures the rental income, applies the correct deductible expenses, and accounts for the finance cost restriction.

For 2026/27, residential landlords can deduct allowable property expenses (letting agent fees, insurance, repairs and maintenance, ground rent) from rental income, but finance costs — mortgage interest and other loan interest — are not deductible in calculating rental profit. Instead, a basic rate (20%) tax credit is given on the finance costs, reducing the tax liability rather than reducing the taxable profit. The distinction matters: landlords who calculate their profit after deducting full mortgage interest are understating their taxable rental income, which is itself a form of non-compliance that the Let Property Campaign addresses.

MTD for Income Tax is extending to landlords with rental income above £50,000 from April 2026 and above £30,000 from April 2027. Landlords brought into compliance through the Let Property Campaign and who meet the income threshold will also need to move onto MTD ITSA — adding a further compliance obligation that requires early engagement.

BrightTax supports the self-assessment return for landlord clients, with the correct treatment of property income, finance cost restriction, and the interaction with other income. For clients coming through the Let Property Campaign, BrightTax handles the amended or late returns required as part of the disclosure — ensuring the figures are accurate and consistent across all relevant years.

Frequently Asked Questions

What is the Let Property Campaign and is it still open?

The Let Property Campaign is an HMRC voluntary disclosure facility for residential landlords with undisclosed rental income. It has been open since 2013 with no announced end date. Landlords who come forward voluntarily typically receive lower penalties than those identified through HMRC investigation. The campaign covers residential lettings in the UK and overseas.

How does HMRC identify landlords with undisclosed rental income?

HMRC uses its Connect data analytics system, which cross-references more than 60 data sources including rental platforms, letting agent records, bank account data, mortgage records, and Land Registry ownership information. A landlord whose property generates identifiable rental income that does not appear on a self-assessment return is likely to receive a nudge letter.

What is the lookback period for a Let Property Campaign disclosure?

The lookback period is four years for errors made with reasonable care (genuine misunderstanding), six years for careless errors, and up to 20 years for deliberate non-compliance. For most landlords using the Let Property Campaign, the six-year careless period is most relevant — meaning a 2026 disclosure would typically cover tax years back to 2020/21.

What penalty applies to a voluntary disclosure through the Let Property Campaign?

For voluntary, unprompted disclosures where the behaviour was careless, HMRC often applies zero penalty where the disclosure quality is high. Where a penalty does apply, voluntary unprompted disclosure limits it to a maximum of 30% of the unpaid tax for careless behaviour. A prompted disclosure (following a nudge letter) typically attracts higher rates, though still lower than rates for a post-investigation settlement.

Does the finance cost restriction apply to all residential landlords?

Yes. Since 2020, residential landlords cannot deduct mortgage interest and other finance costs directly from rental income when calculating rental profit. Instead, a basic rate (20%) tax credit is applied to the finance costs. This restriction applies to individuals letting residential property — it does not apply to companies, furnished holiday lets (now abolished), or commercial lettings.

BrightTax handles the self-assessment return for landlord clients, applying the correct property income treatment, finance cost restriction, and the interaction with other income — including amended returns required as part of a Let Property Campaign disclosure. Find out more about BrightTax or speak to your account manager.

This content may have been developed with the assistance of AI tools. Content is reviewed by a member of the Bright team before publication. Guidance on legislation can be obtained from your industry body.