If you’re earning £1,000 or more in property rental income, you are legally required to report this to HMRC via an annual Self-Assessment Tax Return.

For some, becoming a landlord happens accidentally, and they may be unaware of the rules. Others may have simply missed the deadline due to a busy schedule. Regardless of the reason, if you have undeclared rental income, it’s crucial to take action quickly to avoid penalties and tax investigations.

What Should You Do Now?

1. Calculate Your Income & Expenses
   • Work out exactly how much rental income you’ve received for each tax year.
   • Deduct allowable expenses (e.g., maintenance costs, letting agent fees, mortgage interest).
   • It’s advisable to seek professional advice from an accountant at this stage.
2. Notify HMRC & Declare Profits
   • If HMRC discovers your undeclared income before you come forward, you could face tax investigations and higher penalties.
   • To minimise penalties, it’s best to voluntarily disclose any previous rental income using the Let Property Campaign (LPC).

What is the Let Property Campaign?

The Let Property Campaign (LPC) is a voluntary disclosure service for landlords to declare past rental income and pay tax under more favourable terms.

Key Features of the LPC:

✔ Available for individual landlords (not for Limited Companies, trusts, etc.).
✔ Covers residential properties only.
✔ Has been running since 2013, with no current end date.
✔ Offers a simpler and more lenient way to report past rental income.

How to Disclose Rental Income via the Let Property Campaign

1. Notify HMRC of Your Intention to Disclose
   • Contact HMRC to inform them you’ll be making a disclosure under the LPC.
   • If you use an accountant, they can do this on your behalf.
2. Receive Your Unique Reference Numbers
   • HMRC will send you a Disclosure Reference Number (DRN) and a Payment Reference Number (PRN).
   • Keep these safe, as you’ll need them for submitting your disclosure and making payment.
3. Submit Your Disclosure via the Digital Disclosure Service
   • Complete the Digital Disclosure Service form online.
   • Ensure you have the following details ready:
     • Government Gateway login
     • Unique Taxpayer Reference (UTR), if applicable
     • VAT number (if relevant)
     • National Insurance (NI) number
     • DRN and PRN for your case
   • You must make payment at the same time as the disclosure or no later than 90 days after notifying HMRC.
4. Await HMRC’s Response
   • HMRC will acknowledge your disclosure and confirm if it has been accepted.
   • If further action is required, they will provide instructions.

What About Future Tax Returns?

Once you’ve brought your tax affairs up to date, you will need to submit annual Self-Assessment Tax Returns to report all income, including rental income.

We offer a Personal Tax Return Service for Landlords—get in touch at Letschat@bean-sprout.co.uk to find out how we can help you stay compliant and stress-free!

Why Take Action Now?

✅ Avoid tax investigations & hefty penalties
✅ Bring your tax affairs up to date
✅ Take advantage of the Let Property Campaign’s lenient terms
✅ Gain peace of mind knowing you’re compliant

If you need help navigating the process, contact us today for expert advice and support!