Landlords pay £104m in HMRC’s tax crackdown
Landlords paid out £104m in unpaid taxes in 2025/26 as HRMC “casts its net wider” to catch small-scale property investors.
It is the third consecutive year that HMRC has generated over £100m from voluntary disclosures of unpaid liabilities made through the government’s Let Property scheme, as HMRC gets better at tracking down landlords not paying tax and signposting the ways to pay or get penalised.
According to a Freedom of Information (FOI) request made by chartered accountancy Price Bailey, the number of voluntary disclosures made by landlords to HMRC jumped to 11,511 in 2025/26, the highest level since 2018/19. The average tax recovered per disclosure, however, fell to £9,063, down from last year’s record £13,713.
The data released under the FOI represents tax recovered from voluntary disclosures under the Let Property Campaign (LPC), responsible for netting £674m since its launch in 2013/14, and from other compliance-related activities, such as HMRC’s non-responder and discovery assessment work.
‘Relentless’ capability
Price Bailey said HMRC is increasingly using Land Registry data to identify individuals who own multiple residential properties and may have undeclared rental income.
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Andrew Park, tax investigations partner at Price Bailey, said: “HMRC’s data‑matching capability has become relentless. Most voluntary disclosures are now prompted by HMRC nudge letters, and we are seeing a clear trend in larger numbers of smaller cases. HMRC is casting the net wider and catching landlords who may only have modest rental income but still have undeclared tax liabilities.
“Many of the people being caught out are accidental landlords – people who kept a property after moving in with a partner, inherited a property, or temporarily moved abroad. They are often genuinely unaware that they have taxable profits to disclose.”
He added: “A lot of landlords continue to be caught by the ‘phantom profit’ effect. Since mortgage interest relief was withdrawn, taxable profit can appear even when there is little or no real‑world profit. That mismatch is still driving arrears and compliance failures.”
