Let Property Campaign Voluntary Disclosure: Why It Makes Sense

If you're a landlord and not reported your rental income, it’s crucial to act now. HMRC is ramping up its enforcement efforts, backed by significant investment in data analysis and compliance teams. The Spring Budget pledged an additional £100 million to hire 500 new HMRC compliance officers, along with £79 million for third-party debt collectors over the next five years. These funds build on the 1,800 debt management roles announced in the Autumn Budget.

However, landlords who come forward for the Let Property Campaign voluntary disclosure can benefit from lower penalties and avoid the stress of a full HMRC investigation. To learn more about this incentive from HMRC, explore our complete guide.

Delays can be costly. The longer you wait, the more you risk—in the form of interest, penalties, or even prosecution. Voluntary disclosure, especially before HMRC contacts you, can save you thousands and give you peace of mind.

Whether your omission was accidental or intentional, support is available. If you're unsure how to begin, speak to a tax specialist with experience in LPC disclosures.

Let Property Campaign Voluntary Disclosure Means Lower Penalties

To re-iterate, the best time to come forward regarding your unpaid taxes is now, i.e. before HMRC contacts you. By making a Let Property Campaign voluntary disclosure, you may significantly pay lower penalties. Once HMRC initiates an enquiry, the penalties increase.

If the taxpayer has never filed any tax returns, and therefore not notified HMRC of their liability to tax, the following penalties will apply.

Understanding the definition of behaviour

On the other hand, when the taxpayer has filed their tax return but failed to declare the income from the property, the following penalties apply:

Quality of Disclosure: A Key Factor in Penalty Reduction

Penalties may be reduced based on how fully and honestly a landlord engages with HMRC. A high-quality disclosure includes:

• Telling HMRC about the issue (30%)
• Helping HMRC understand it (40%)
• Giving Access to Records (30%)

Example: LPC Voluntary Disclosure vs. Prompted Disclosure (Failure to Notify)

His unpaid tax is calculated as follows:

The total unpaid tax up until 2022/23 is £113,969.

Assuming non-deliberate behaviour and full cooperation, the penalty rates will be calculated as follows:

Based on the above rates the penalty and interests will be as follows:

The interests have been calculated with HMRC’s interest calculator.

In the example above, a voluntary disclosure results in a total cost of £155,710, whereas a prompted disclosure pushes that figure up to £167,107—a difference of £11,397.

In our experience, HMRC may not accept LPC disclosures for the most recent tax year. Therefore, taxpayers making LPC for 2023/24 may receive a notice from HMRC requesting that they file the return instead. Should they do so, there would be penalties for late filing and late payment, along with the interests for late payment.

If a 2023/24 tax return is filed six months late, the following penalties may apply:

Late Filing Penalties

• Initial penalty: £100 (charged as soon as the return is late)
• Daily penalties: £10 per day for up to 90 days, totaling £900
• Six-month penalty: the higher of £300 or 5% of the unpaid tax liability (£999.30, as 5% of £19,986)

Total Late Filing Penalties:

£100 + £900 + £999.30 : £1,990.30

Late Payment Penalty:

• 5% of the unpaid tax liability, which is £999.30
• 5% of the unpaid tax liability, which is £999.30

Late payment interests: £771

Total Estimated Penalties for 2023/24: £4,759.90

Example: Voluntary Disclosure vs. Prompted Disclosure (Inaccurate Returns)

The total unpaid tax liability up to and including the 2022/23 tax year is £59,409. Penalties for these earlier years are calculated based on the nature of the disclosure and the taxpayer's behaviour, as detailed below.

For the 2023/24 tax year, a tax return has already been submitted. As a result, any undeclared income must be corrected by amending the filed return. The amendment window remains open until 31 January 2026, allowing time to rectify the inaccuracy without incurring additional penalties, provided the correction is made within this period.

However, since the payment deadline was 31 January 2025, late payment penalties and interest will still apply. For simplicity, we have excluded payments on account from this calculation.

The penalty rates will be calculated as follows:

Based on the above rates the penalty and interests will be as follows:

In this case, coming forward voluntarily leads to a total cost of £85,443, compared to £94,354 if HMRC contacts you first—a difference of £8,911.

As stated earlier, the penalties for 2023/24 tax year will be calculated differently. If the return is paid now, i.e. date of the article publishing date,

Late Payment Penalty:

5% of £12,614 = £631

Interest on late payment = £355

The total tax, interest and penalty for 2023/24 tax year is £13,600.

What happens if you cannot pay the full amount?

HMRC expects you to pay what you owe when you make your disclosure.

If you cannot pay the full amount, you’ll need to let HMRC know as soon as possible and before you send in your disclosure. To do this, you should contact the Let Property Campaign Helpline.

When you phone, HMRC will want to talk to you about your current financial position so they can tell you what they think you should pay and when. To help HMRC decide, you’ll need to tell them:

If you cannot pay the full amount, do not submit your disclosure or payment until you have spoken to HMRC.

Conclusion

The message is clear: if you have undeclared rental income, now is the time to act. HMRC is actively increasing its enforcement efforts, and delays only make matters worse—through rising penalties, interest charges, and the stress of potential investigation.

The Let Property Campaign voluntary disclosure offers a unique opportunity to come forward and benefit from significantly lower penalties. Whether your omission was accidental or deliberate, early disclosure puts you in control and can save you thousands of pounds.