Three years running. That is how long HMRC has been pulling more than £100 million per year from landlords through its Let Property Campaign.
The latest figures, obtained by chartered accountants Price Bailey through a Freedom of Information request, put the 2025 to 2026 total at £104.3 million. Up from £36.8 million in 2019 to 2020. Nearly three times the amount in six years.
And the number of landlords being caught is accelerating.
More Landlords, Smaller Amounts
11,511 landlords made voluntary disclosures in 2025 to 2026. The highest figure since 2018 to 2019. A 47% jump from the 7,803 who came forward the year before.
But the average payment per disclosure fell. Down from a record £13,713 in 2024 to 2025 to £9,063 last year.
That combination tells you something about how the campaign has shifted. Andrew Park, tax investigations partner at Price Bailey, was direct about it: “HMRC is casting the net wider and catching landlords who may only have modest rental income but still have undeclared tax liabilities.”
Bigger numbers of smaller cases. HMRC is no longer just chasing large-scale landlords with significant portfolios. The dragnet has widened.
Since the Let Property Campaign launched in 2013 to 2014, it has generated £674 million in total.
How HMRC Finds Them Before They Come Forward
Most of those 11,511 disclosures were not spontaneous. They were prompted.
HMRC cross-references Land Registry records against its own tax data. If you own multiple residential properties and your self-assessment returns do not reflect rental income, the system flags it. A nudge letter arrives asking you to check whether you have paid the correct amount of tax.
The letter is carefully worded. It is not a formal investigation notice. But it signals clearly that HMRC already has information about your property holdings. Ignoring it is not a safe option. Non-responders face compliance action and discovery assessments, not just a polite follow-up.
As Park put it: “HMRC’s data-matching capability has become relentless.”
The Landlords Who Did Not Know They Owed Anything
Not everyone who received a nudge letter is a deliberate evader.
A significant share of those caught are what Price Bailey calls accidental landlords. Someone who kept a flat after moving in with a partner. Someone who inherited a property and started renting it out. Someone who moved abroad temporarily and let their home while they were gone.
Park described them plainly: “They are often genuinely unaware that they have taxable profits to disclose.”
That lack of awareness does not reduce liability. The tax was still due. Interest runs on unpaid amounts from the date it was owed, not the date HMRC contacts you.
The Phantom Profit Problem
One of the biggest drivers of genuine confusion among landlords is the mortgage interest restriction, phased in between 2017 and 2020 and now fully in place.
Before Section 24, landlords deducted mortgage interest directly from rental income before calculating taxable profit. That system is gone. Now, they declare gross rental income in full and receive a 20% basic rate tax credit on finance costs instead.
The practical effect: for higher-rate taxpayers, taxable profit on paper can be significantly higher than actual cash in hand after mortgage payments. A landlord covering a mortgage with rental income and making little real-world profit can still have a substantial tax liability.
Price Bailey called it the phantom profit effect. Park said it is “still driving arrears and compliance failures” years after the change took effect.
Repairs vs Improvements: The Other Common Mistake
A second area catching landlords out regularly is the distinction between revenue expenses and capital improvements.
Replacing a kitchen like-for-like, same layout, similar specification, is generally an allowable revenue expense and reduces taxable income. Upgrading to a significantly better kitchen, reconfiguring the layout, extending into another room, is treated as a capital improvement. It does not reduce income tax liability.
That distinction sounds straightforward. In practice, with contractors, invoices, and multiple properties involved, it trips people up repeatedly.
What Has Changed Around Landlord Tax More Broadly
The Let Property Campaign figures do not sit in isolation. Several other changes have tightened the compliance environment for landlords in the past eighteen months.
The Capital Gains Tax annual exemption dropped to £3,000. Higher CGT rates now apply to residential property disposals made after October 2024.
From April 2026, Making Tax Digital for Income Tax requires quarterly digital submissions from landlords and sole traders whose combined gross property and self-employment income exceeds £50,000. That threshold falls to £30,000 from April 2027 and £20,000 from April 2028.
Some landlords have moved properties into limited company structures to retain mortgage interest deductibility. Corporation tax rates between 19% and 25% have made that decision considerably more complex, and profit extraction through salary and dividends adds another layer of planning that many are getting wrong.
Voluntary Disclosure Versus Waiting to Be Found
Let Property Campaign exists precisely because HMRC prefers landlords to come forward rather than be discovered.
Landlords who make a voluntary disclosure under the campaign can generally expect lower penalties than those identified through HMRC’s own compliance activity. They must still pay the outstanding tax and applicable interest. But the difference in penalty treatment between coming forward and being caught can be material.
Leaving an undeclared liability to surface through a nudge letter, and then ignoring that letter, puts the landlord in the worst possible position.
If You Have Rental Income That Has Not Been Declared
The Let Property Campaign remains open. If you have rental income from previous years that has not been properly reported, making a disclosure now rather than waiting is the better outcome in almost every scenario.
Lanop’s landlord accounting team works with property owners across the UK on rental income reporting, self-assessment compliance, and Making Tax Digital preparation. If you are unsure whether your returns are correct, or you have received a nudge letter and need to understand your options, get in touch today.
