Landlords in the UK are feeling the impact of HMRC’s intensified efforts to recover unpaid taxes, with the agency collecting £104 million from voluntary disclosures in the last year. This marks the third consecutive year where collections have exceeded £100 million, highlighting HMRC’s growing capability in tracking down landlords who fail to declare rental income.
How Many Landlords Are Affected?
According to a recent Freedom of Information request by Price Bailey, the number of voluntary disclosures made by landlords surged to 11,511 in the 2025/26 financial year, the highest since 2018/19. This indicates that more landlords are either becoming aware of their tax obligations or are being compelled to comply due to increased scrutiny.
What Are the Average Tax Recoveries?
While the total amount collected is significant, the average tax recovered per disclosure has decreased to £9,063, down from £13,713 the previous year. This drop suggests that while more landlords are coming forward, the amounts owed may be lower on average, possibly due to improved compliance or changes in rental income levels.
What This Means for Landlords
For landlords, this trend underscores the importance of compliance with tax regulations. HMRC’s use of Land Registry data to identify property owners with multiple residential holdings means that landlords should proactively declare any rental income to avoid penalties. The Let Property Campaign, which has recovered £674 million since its inception in 2013/14, continues to be a vital tool for HMRC in ensuring tax compliance in the rental sector.
Frequently Asked Questions
What should landlords do if they haven’t declared rental income?
Landlords who have not declared rental income should consider making a voluntary disclosure to HMRC to avoid penalties. Seeking advice from a tax professional can also be beneficial.
How can landlords stay compliant with tax regulations?
Landlords can stay compliant by keeping accurate records of rental income and expenses, understanding their tax obligations, and regularly reviewing guidance from HMRC.