HMRC Let Property Campaign

If you are a non-resident individual in receipt of UK rental income, you are legally required to declare this income to HMRC.

If you have forgotten to report your rental income,  the HMRC Let Property Campaign (LPC) offers a formal process to bring your tax affairs up to date. This voluntary disclosure facility is designed specifically for individual landlords to regularize their position while benefiting from more favorable terms than those offered during a forced investigation.

In this article, we will cover the specific steps required to navigate the LPC successfully.

The Reporting Requirement: A Common Misconception

It is a common and costly mistake to assume that if no tax is payable i.e. because the income falls under the personal allowance, the income does not need to be reported to HMRC.

You may find that your allowable expenses, such as property maintenance, insurance, and the restricted relief on mortgage interest, offset your rental profits to the point where your net income falls below the UK personal allowance. Even in this scenario, providing that you are a non-resident landlord, the income is still reportable to HMRC.
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The Let Property Campaign as a Mechanism for Correction

The Let Property Campaign is the official mechanism provided by HMRC to help landlords report previously undisclosed rental income and bring their UK tax affairs into alignment.  Whether you have one property that you have let out for a few years or a larger portfolio of residential investments, the LPC is the safest route to transparency.

In an era where HMRC receives automated data from letting agents, air bnb, booking.com and other property platform providers, the window for making an unprompted disclosure is narrowing. As such, using the LPC proactively is a strategic move to regain compliance on your own terms.

Determining the Disclosure Period: The Six-Year Rule

When preparing a disclosure under the Let Property Campaign, a primary question for many landlords is: "How many years do I need to go back?" The answer depends largely on the "behavior" that led to the non-disclosure, but for most standard cases involving a failure to take reasonable care, you will typically need to go back six years from the end of the relevant tax year.

As we approach the 2026/27 tax year, a standard disclosure would generally require you to account for income all the way back to the 2020/21 tax year.  
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The Five-Step Process to Regularization

Navigating the Let Property Campaign requires a methodical approach to ensure that the final submission is accurate and robust. Providing that you follow these five steps, the process moves from initial notification to a final "seal of approval."

1. Make a Notification

The first step is to formally notify HMRC of your intention to make a disclosure. This is a relatively simple digital notification that alerts the Let Property Campaign team that you are preparing your figures. You can make a notification to HMRC that you intend to make a LPC disclosure here.

2. Gather Records and Complete Calculations

During this phase, you must gather all relevant financial records. This includes bank statements showing rental receipts and receipts for all allowable expenses. You must then calculate the net profit for each tax year in question. This step is often complex for expats, as you must ensure that you are applying the correct UK tax rules for each specific year, such as the varying rules surrounding finance cost restrictions.

3. Prepare the Disclosure

With the calculations finalized, you must prepare the formal disclosure submission. This involves detailing the tax due, the interest accrued on that tax, and the self-calculated penalty. You will also need to provide a brief explanation of why the income was not previously declared. This narrative is vital, as it supports your choice of penalty percentage.

4. Pay What You Owe

Once the disclosure is submitted, you are required to pay the total amount calculated in step three. If you are unable to pay the full amount in one lump sum, it may be possible to negotiate a "Time to Pay" arrangement with HMRC, providing that you can demonstrate financial hardship.

5. Wait for HMRC Approval

After submission, HMRC typically takes approximately 90 days to review the disclosure. If they are satisfied that the information is complete and the behavior has been correctly categorized, they will issue an acceptance letter. This letter serves as your "seal of approval," confirming that your affairs are now up to date for the period covered.

Understanding Penalties and Mitigation

The financial consequences of a disclosure are not limited to the unpaid tax and interest; penalties are a significant factor. The severity of these penalties depends on the behavior of the taxpayer and whether a tax return has been filed omitting the rental income. HMRC categorizes behavior into three main tiers:
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• Reasonable Excuse: You intended to comply but a significant life event or complication prevented it. (0% to 10% penalty).
• Careless: You failed to take reasonable care to ensure your tax affairs were correct. (Typically 10% to 30% for unprompted disclosures).
• Deliberate: You knew you had a tax obligation and intentionally chose not to meet it. (Significantly higher penalties, up to 100%)

Mitigation is possible by showing that you have been helpful during the process. By providing "telling, helping, and giving" (disclosing fully, assisting with valuations, and providing access to records), you can often reduce the penalty to the lower end of the statutory range.


You can find further guidance on HMRC penalties for failure to notify here or inaccurate returns here.
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The Strategic Advantage of Voluntary Disclosure

Choosing to come forward voluntarily via the Let Property Campaign is almost always the superior strategy compared to waiting for HMRC to find you. The primary benefits include:
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1. Reduced Penalties: Voluntary disclosures attract significantly lower penalty percentages than those discovered via an HMRC investigation.
2. Avoidance of Prosecution: While rare for standard rental cases, a voluntary disclosure virtually removes the risk of criminal investigation for tax evasion.
3. Removal of Stress: The uncertainty of "waiting for the letter" can be a significant burden. Completing the LPC process provides legal certainty and peace of mind.

How Global Tax Consulting Can Help

Global Tax Consulting helps landlords navigate the LPC from start to finish. We handle the notification, the complex multi-year tax calculations, and the preparation of the formal disclosure.

Our primary goal is to work with HMRC to mitigate and reduce penalties to the absolute minimum allowed by law. In many cases, the savings we achieve through penalty mitigation effectively cover our fees, making our professional representation a cost-neutral or even cost-saving exercise for our clients.