Let Property Campaign: Formal Disclosure Route for Landlords with Undisclosed Rental Income

For UK residential landlords with undisclosed rental income, the Let Property Campaign is the working voluntary disclosure route. It has been open since 9 September 2013 with no announced end date, it operates within the Schedule 41 FA 2008 failure-to-notify framework, and it delivers materially better penalty outcomes than waiting for HMRC to discover the position.

This page walks the three-step process (notify, disclose, pay), the eligibility criteria, the penalty bands and disclosure-mitigation floors, the timeline interactions with the HMRC discovery framework, and two worked scenarios at different ends of the penalty spectrum. It is written as the operational reference for landlords coming forward voluntarily and for accountants assessing whether LPC is the right route in a given case.

What the Let Property Campaign covers

The LPC is for residential rental income. This includes:

• Long-term let property (buy-to-let, accidental landlords, family rentals).
• Short-term and holiday lets (whether or not previously qualifying as a furnished holiday let; the FHL regime was abolished from April 2025).
• Lodger arrangements that fall outside rent-a-room relief (for example, where the let is in a property that is not the landlord's main residence).
• Rent-a-room arrangements that exceed the £7,500 threshold and have not been declared.

The campaign does not cover:

• Commercial property rental income (use the general Digital Disclosure Service).
• Mixed-use property income (the residential portion can be disclosed via LPC; the commercial portion via DDS, but in practice such cases are usually combined under one of the routes by agreement with HMRC).
• Offshore rental income (use the Worldwide Disclosure Facility, which carries the FA 2017 Schedule 18 Failure-to-Correct overlay).
• Corporate landlord positions (companies disclose via the general corporation tax mechanism, not LPC).
• Cases involving deliberate fraud with criminal-prosecution exposure (use the CoP9 / Contractual Disclosure Facility route).

The three-step LPC process

Step 1: Notify

The landlord submits the gov.uk landlord disclosure form. The notification states the intent to disclose without yet committing to specific figures. HMRC acknowledges the notification, typically within 14 days, and provides a Disclosure Reference Number (DRN). The DRN is used throughout the rest of the process.

Critical operational point: notification carries no penalty consequence. The penalty exposure crystallises later, on disclosure and payment. This is one of the practical advantages of LPC: a landlord can notify intent to disclose, securing the disclosure-route status, while still gathering the underlying records and computations. The "LPC notification triggers immediate penalty exposure" framing in some commentary is wrong.

Step 2: Disclose

Within 90 days of HMRC's acknowledgment, the landlord submits the full disclosure. The disclosure covers:

• Tax. The undeclared rental net profit for each year, calculated on the same basis as a correctly-filed self-assessment return: gross rental income less allowable revenue expenses (mortgage interest restricted to a 20 per cent tax credit under section 24, agent fees, repairs, insurance, utilities for void periods, council tax for void periods). For each year, the additional income tax is the marginal rate applied to the net profit.
• Interest. Repayment interest from the original due date of each year's tax to the disclosure date, at HMRC's published interest rate. The rate has fluctuated significantly in 2023-2026 with the broader interest-rate environment.
• Penalty. Calculated within the Sch 41 framework, with band depending on behaviour and floor depending on disclosure type and timing (see below).

Step 3: Pay

The full liability is paid on disclosure. HMRC's time-to-pay arrangements are available for landlords who cannot pay in full immediately; arrangements typically run 12 to 24 months with interest accruing on the outstanding balance. Time-to-pay is requested as part of the disclosure submission.

The penalty bands and disclosure-mitigation floors

LPC disclosures operate within the Schedule 41 FA 2008 failure-to-notify framework. The standard maxima and disclosure-mitigation floors are:

Behaviour	Cat 1 max	Unprompted floor	Prompted floor
Non-deliberate (within 12 months)	30%	0%	10%
Non-deliberate (outside 12 months)	30%	10%	20%
Deliberate not concealed	70%	20%	35%
Deliberate and concealed	100%	30%	50%

The "within 12 months" qualifier on the non-deliberate floor is one of the practical differences between Schedule 41 (failure to notify) and Schedule 24 FA 2007 (inaccuracy). The 12-month clock runs from when liability to notify chargeability arose under TMA 1970 section 7: 5 October following the end of the first tax year in which the income was received. A landlord who started receiving rental income in August 2024 had to notify by 5 October 2025; LPC disclosure made by 5 October 2026 (within 12 months of the section 7 deadline) qualifies for the 0 per cent unprompted floor on non-deliberate behaviour.

Offshore Category 2 / 3 territory uplifts apply where the disclosed matters relate to offshore residential rental (which the LPC does not generally accept; WDF is the right route for offshore). For UK rental income, the Category 1 figures above are the operative bands.

LPC vs filing amended returns

Where the disclosure relates to inaccurate self-assessment returns that were filed but contained errors (rather than a complete failure to register for self-assessment), the alternative to LPC is amending the returns under TMA 1970. Amendments to self-assessment returns can be made within 12 months of the original filing date. Outside that 12-month amendment window, the position can only be corrected by:

• An overpayment-relief claim under TMA 1970 Schedule 1AB (where the landlord overpaid).
• A voluntary disclosure under LPC, DDS or another disclosure route (where the landlord underpaid).

LPC is the preferred route for underpaid positions because it operates within the Schedule 41 failure-to-notify framework with its more favourable mitigation floors. Amending a return after the 12-month window does not by itself unlock the unprompted-floor protection; LPC notification is the cleaner route.

What HMRC requires in the disclosure submission

The LPC disclosure submission requires a structured year-by-year computation. HMRC's published disclosure form calls for the following per year:

• Gross rental income.
• Allowable expenses (categorised: agent fees, repairs, insurance, utilities, council tax, mortgage interest before section 24 restriction, other deductible costs).
• Mortgage interest restriction calculation under section 24 (20 per cent tax credit on disallowed interest).
• Net rental profit.
• Total taxable income for the year (rental net profit plus any other taxable income on which the disclosure depends).
• Tax due at the appropriate marginal rate.
• Interest from due date to disclosure date.
• Penalty calculation with behaviour band and disclosure-floor selection.

The form also requires identification of all properties involved, the periods they were let, and the tenancy types. HMRC may follow up with information requests on specific entries; the disclosure should anticipate likely queries and provide supporting documentation upfront where practical.

How many years to disclose

The number of years to include in the LPC disclosure depends on the applicable TMA 1970 section 29 discovery time limit:

• Innocent error, UK rental: 4 years under section 34. Disclosure covers the 4 years up to the most recent complete tax year.
• Careless behaviour, UK rental: 6 years under section 36(1). Disclosure covers the 6 years up to the most recent complete tax year.
• Deliberate behaviour: 20 years under section 36(1A). LPC is rarely the right route in deliberate cases; CoP9 / CDF is typically appropriate.
• Offshore (use WDF, not LPC): 12 years under section 36A FA 2019 for offshore innocent error, with the FA 2017 Sch 18 FtC overlay applying to disclosures that should have been made by 30 September 2018.

For most LPC cases, the disclosure spans 4 to 6 years. The behaviour-band characterisation determines whether the 4-year or 6-year window applies, which has a material effect on the total liability.

Section 24 mortgage interest restriction within LPC disclosures

For tax years 2020/21 onwards, the full section 24 ITTOIA 2005 mortgage interest restriction applies to UK residential rental income for individual landlords (not for companies). Under section 24, mortgage interest is not deductible from rental profit as an expense; instead, the landlord receives a 20 per cent tax credit on the disallowed interest. This is the most common single computational complication in LPC disclosures because section 24 raises the taxable rental net profit relative to the pre-2017 position.

The mechanic on each year's disclosure:

1. Start with gross rental income.
2. Deduct all allowable expenses except mortgage interest. Result: rental profit before section 24 mortgage-interest treatment.
3. Tax the rental profit at the landlord's marginal rate.
4. Apply the 20 per cent tax credit on mortgage interest separately, capped at the lower of mortgage interest paid, rental profit, or non-savings income above the personal allowance.

For higher-rate landlords, section 24 has a material effect: a property with £15,000 gross rent, £4,000 of non-mortgage expenses, and £6,000 of mortgage interest produces £11,000 of rental profit (after non-mortgage expenses), £4,400 of higher-rate tax, less £1,200 of section 24 credit (20 per cent of £6,000), giving net tax of £3,200. Pre-2017 the same numbers gave rental profit of £5,000 (£15,000 - £4,000 - £6,000), with higher-rate tax of £2,000. Section 24 has therefore increased the tax by £1,200 in this example.

LPC disclosures covering tax years from 2020/21 must apply section 24 in full. Earlier years (2017/18 to 2019/20) had a partial restriction (25 per cent of mortgage interest disallowed in 2017/18, rising to 100 per cent by 2020/21). Multi-year disclosures spanning the transition years must apply the right percentage for each year.

Common mistakes in LPC disclosures

Three recurring errors in landlord-prepared LPC disclosures:

• Treating capital improvements as deductible repairs. The repair-vs-capital line is one of HMRC's standard challenge areas. Replacing a single window like-for-like is a repair; replacing the entire window scheme to upgrade is capital. Where the disclosure includes large repair items, prepare supporting documentation showing the work was repair rather than improvement.
• Missing the section 24 transition for pre-2020/21 years. Disclosures covering 2017/18, 2018/19 or 2019/20 must apply the partial section 24 restriction for those years. Treating all years as fully restricted overstates the tax; treating them as fully deductible understates it.
• Wrong behaviour band. The default position landlords reach for is "innocent error" (no penalty band attaches at all under Sch 41 in some circumstances). HMRC's default position is "careless" or "non-deliberate" (30 per cent maximum, 0-15 per cent floor). The distinction matters for the penalty; landlords arguing for innocent error should be ready to articulate why care was taken and why the error nonetheless occurred.

Worked scenario 1: inherited flat, 4 years, unprompted within 12 months

Background. A higher-rate-taxpayer landlord inherits a flat in March 2022 (2021/22 tax year). The flat has been let continuously since April 2022 at £1,000/month gross rent. Net profit (after allowable expenses including section 24-restricted mortgage interest) is approximately £8,000 per year. The landlord did not declare the rental income, believing (incorrectly) that inherited property income was outside self-assessment.

Realisation. In April 2026, the landlord engages an accountant for unrelated CGT planning. The accountant identifies the undeclared rental income and the LPC route.

Timing analysis. Section 7 notification deadline for first liability (2022/23 tax year, rent received from April 2022): 5 October 2023. Disclosure in April 2026 is approximately 30 months after the section 7 deadline, outside the 12-month window.

Wait. Section 7 deadline for the latest year (2024/25): 5 October 2025. Disclosure in April 2026 is approximately 6 months after the 2024/25 section 7 deadline. For 2024/25 specifically, the disclosure is within 12 months of section 7 (qualifies for 0 per cent unprompted floor). For 2022/23 and 2023/24, the disclosure is outside the 12-month window (10 per cent unprompted floor).

HMRC's operational practice has historically treated multi-year LPC disclosures on a year-by-year basis for the 12-month qualifier. The landlord secures the 0 per cent floor on 2024/25 and the 10 per cent floor on the earlier years.

Calculation. Total tax loss: 4 years × £8,000 × 40 per cent = £12,800 (£3,200 per year). Penalty: 2024/25 at 0 per cent (£0); 2023/24 + 2022/23 + 2021/22 at 10 per cent (£320 × 3 = £960). Interest: approximately £700 across the four years. Total settlement: £12,800 + £700 + £960 = £14,460.

Worked scenario 2: family rental, 7 years, prompted via nudge letter

Background. A higher-rate landlord rents a property to family members for 7 tax years (2018/19 to 2024/25) at slightly below market rent (£15,000 net profit per year). The landlord did not declare the income, on the basis that "family rental does not count" (incorrect; family rental at any rent above peppercorn is rental income for tax purposes).

Trigger. March 2026: nudge letter from HMRC (Land Registry + tenancy deposit data match).

Route choice. LPC is the right route. The behaviour band is careless (genuine misunderstanding of family-rental treatment) rather than deliberate. The disclosure is prompted (nudge letter received). Whether the disclosure qualifies for unprompted treatment under HMRC operational practice for nudge-letter cases is verified at notification.

Calculation. Total tax loss: 6 years × £15,000 × 40 per cent = £36,000 (years 2019/20 to 2024/25 within the section 36(1) 6-year careless limit; 2018/19 falls outside even the 6-year bracket and is time-barred). Penalty: prompted careless 15 per cent (HMRC operational practice not extending unprompted floor to this case): £36,000 × 15 per cent = £5,400. Interest across 6 years: approximately £4,000. Total settlement: £36,000 + £4,000 + £5,400 = £45,400.

The 2018/19 year falls outside the 6-year bracket and is not assessable. The landlord pays for 2019/20 to 2024/25 only.

How LPC sits alongside the other disclosure routes

The LPC is one of four HMRC voluntary-disclosure routes for landlord-adjacent matters:

• LPC: UK residential rental income. This page.
• Worldwide Disclosure Facility (WDF): offshore income, gains, assets. Used for offshore residential or commercial rental, foreign holiday lets, foreign capital gains on let property.
• Digital Disclosure Service (DDS): UK non-rental matters not within LPC. Used for commercial-property income, undeclared capital gains, SDLT positions, and any other UK tax matter outside LPC scope.
• CoP9 / CDF: deliberate fraud with criminal-prosecution exposure. Used where the landlord's behaviour was deliberate and concealed, or where HMRC has opened a civil-fraud investigation. See the CoP9 / CDF page for the criminal-immunity route.

The penalty framework under Schedule 24 FA 2007 applies to inaccuracies in returns that were filed but were wrong. The Schedule 41 framework applies to failure-to-notify cases under LPC. The two regimes can apply on the same facts where the landlord both failed to register for self-assessment in some years and filed inaccurate returns in others. HMRC will pursue the appropriate regime for each year on its facts.

What happens after the disclosure is accepted

HMRC's review of the LPC disclosure typically concludes within 60 to 120 days of submission. The acceptance letter confirms the tax, interest and penalty figures, sets out the payment schedule (or time-to-pay arrangement), and closes the disclosure. The landlord is then in the same compliance position as if the original returns had been filed correctly.

Three operational follow-ups typically follow an accepted LPC disclosure: (i) the landlord should be registered for self-assessment going forward (if not already), with the rental income reported annually on the SA105 form; (ii) the landlord should retain the disclosure documentation for the standard record-retention period; (iii) the landlord's risk-scoring status with HMRC is updated, and HMRC may carry out routine cross-checks on subsequent returns for 12 to 24 months.

If you are a UK residential landlord with undisclosed rental income, the LPC is almost certainly the route. The form at the foot of the page is the route to a structured first-pass assessment of the years involved, the likely behaviour band, and the section 7 timing analysis.