Let Property Campaign accountants for landlords disclosing rental income
You have rental income that was never declared, and either an HMRC letter has arrived or you have decided to come forward before one does. That distinction is the first thing a specialist reviews, because it sets your penalty floor: an unprompted disclosure of a non-deliberate failure to notify can reach 0%, while the same facts disclosed after HMRC makes contact start at 10% under Schedule 41 FA 2008. Those floors become 10% and 20% where HMRC become aware more than 12 months after the tax first went unpaid, which is the usual position for older income. Next comes the route: residential rental income goes through the Let Property Campaign, commercial or mixed-use property through the Digital Disclosure Service. Then behaviour, and whether HMRC was ever told, which together fix how many years you reconstruct. Your accountant prepares the notification, the year-by-year computation of tax, interest and penalty, and the disclosure inside the 90-day window. Nothing is signed until the route is settled, the number is checkable and the payment position is known. Landlords anywhere in the UK, or now living abroad, can do all of this by video call, phone and email.
What lands on your desk
Disclosing undeclared rental income: routes, years and penalties
Which route fits, and why it is not a free choice
Residential landlords, UK resident and non-UK resident, with undisclosed rental income can use the Let Property Campaign. It does not cover companies, trusts or commercial property. Commercial and mixed-use letting goes through the Digital Disclosure Service instead, on the same notify, disclose and pay pattern. Where offshore income or assets are involved, the Worldwide Disclosure Facility and the Failure to Correct rules apply and the penalties change sharply. The disclosure mechanics guide walks through each step.
How many years you have to go back
There is no single answer, and six years is the most common wrong one. Under TMA 1970 the ordinary window is 4 years, with no behaviour element. Careless behaviour extends it to 6 years under section 36(1) and deliberate behaviour to 20 years under section 36(1A)(a). If you were never sent a return and never told HMRC you were chargeable, the tax lost through that failure to notify under section 7 carries 20 years under section 36(1A)(b) whatever the behaviour, unless you had a reasonable excuse. Offshore matters carry a separate 12-year window under section 36A, even where nobody was careless. How discovery assessments work sets out the tests.
Prompted against unprompted, and what it is worth
Where you never told HMRC you were chargeable, Schedule 41 FA 2008 applies: maximum penalties of 30% for non-deliberate behaviour, 70% for deliberate and 100% for deliberate and concealed. Disclosure mitigates within those bands. For a non-deliberate failure the floors are 0% unprompted and 10% prompted where HMRC become aware of it within 12 months of the tax first going unpaid, and 10% and 20% after that. Deliberate failures floor at 20% unprompted and 35% prompted, or 30% and 50% where concealed. Where returns were filed but wrong, Schedule 24 FA 2007 applies, with a 15% prompted floor for careless behaviour.
Rebuilding income and expenses without the records
Few landlords hold clean books going back six or twenty years. Bank statements, tenancy agreements, agent statements, mortgage interest certificates and deposit scheme records are the usual reconstruction sources. Expenses matter as much as income: repairs, agent fees, insurance and the finance cost restriction all reduce what you disclose, and HMRC expects a reasoned basis, not round numbers. Income tax records run to 5 years after the 31 January following the tax year.
Interest, and paying what you owe
Interest runs on the unpaid tax from the date it was originally due, not from the date you disclose, so on old years it is larger than most expect. It is not a penalty, and coming forward does not reduce it. Tax, interest and penalty go in as one figure, payable on submission. Size the tax on a year first with the rental income tax calculator.
What a Let Property Campaign disclosure costs
What HMRC collects comes in three parts: the tax for each year, interest on it from each original due date, and the penalty at the band the disclosure supports. The tax and interest follow from the figures; the penalty is the part that timing and the quality of the disclosure can move, and the penalty calculator shows how the bands work. Our own fee is set as a fixed amount once the route and the years are known, and you agree it before the work begins.
How we help
How we handle a Let Property Campaign disclosure
A first review that fixes the route and the years
That review covers what income was received, what property it came from, whether any of it is offshore, whether returns were filed, and what HMRC has already sent you. That settles the route and the behaviour category. Nothing is notified until both are, because notification starts a clock.
Notification and the 90-day window
Our team prepares and submits the notification. HMRC acknowledges it and issues a disclosure reference, and the 90 days to disclose and pay run from that acknowledgement. Notifying does not create penalty exposure. The work is planned backwards from that deadline, so the computation and payment position are ready in time.
A year-by-year computation you can check
Your landlord tax accountant prepares a schedule per tax year: rental income, allowable expenses, the finance cost position, tax due, interest to the disclosure date and the penalty at the band claimed. Where records are missing, the assumptions are written down and evidenced, so the basis is visible and defensible.
The mitigation case, and what follows
The penalty band is argued, not filled in. Telling, helping and giving access move a penalty within its band, and the disclosure is prepared so your co-operation is evident from it. Where the facts support suspension of a careless penalty or a reasonable excuse, the point is made at the time rather than on appeal.
Not sure which of these applies to you? A free consultation sets out where you stand, with no obligation.
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Frequently asked questions
It usually lowers the penalty floor, the part of the bill you can influence. A disclosure is unprompted only where you had no reason to believe HMRC had discovered it, or was about to. For a non-deliberate failure to notify chargeability, the floor is 0% unprompted against 10% prompted where HMRC become aware within 12 months of the tax first going unpaid; after 12 months those become 10% and 20%. The tax and interest are the same either way.
It depends on behaviour and on whether HMRC was ever told, not on the campaign. If you were outside self assessment and never notified HMRC about the rent, it can assess 20 years back whatever the behaviour, unless you had a reasonable excuse. Otherwise the ordinary window is 4 years, careless behaviour takes it to 6 and deliberate behaviour to 20, with a 12-year window for offshore matters even without carelessness. A specialist reviews each year separately, because the category can differ between them and the honest characterisation is what the computation rests on.
Reconstruction is normal and HMRC expects it. Bank statements, agent statements, tenancy agreements and mortgage interest certificates usually carry most of the picture. Where a figure has to be estimated, the method is stated and applied consistently across years rather than left as a round number. Expenses are reconstructed as carefully as income, because leaving them out overstates what you pay.
Often yes, but the disclosure is then prompted and the floor rises. What the letter is matters more than that it arrived. A nudge letter asking you to check your position is not an assessment, and the reply and its timing carry weight: see the nudge letter playbook. An opened enquiry is different again, so a specialist reads the letter first.
The disclosure is still made on time and a time to pay arrangement is requested alongside it. HMRC asks about your income, outgoings, assets and why payment in full is not possible, then decides case by case. Interest continues to run on the balance. Disclosing and asking beats missing the window the mitigated penalty was agreed against.
Criminal prosecution sits outside the campaign routes, and no route other than the Contractual Disclosure Facility carries immunity from it. The campaigns exist for civil settlement. What a specialist can do is match the route to the facts: where deliberate behaviour with prosecution exposure is present, the Code of Practice 9 track, with its 60-day acceptance window, is the correct step.
Our fee is set as a fixed amount once the route and the years are known, and you agree it before the work begins. What moves it is the work itself: how many tax years have to be reconstructed, how complete the records are, and whether offshore income brings a different disclosure route into play. The fee is separate from what HMRC collects, which is the tax for each year, interest from each original due date and the penalty at the band the disclosure supports. The penalty calculator shows how the bands work.
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