Accountants for landlords making an HMRC rental income disclosure
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. 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, which fixes 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.
What lands on your desk
What you are dealing with
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). 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: unprompted floors of 0% for a non-deliberate failure disclosed within 12 months of the liability arising, then 20% and 30%; prompted floors of 10%, 35% and 50%. 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 specialist reviews
What a specialist reviews
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
A specialist firm from the partner network 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 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.
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