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HMRC has been contacting landlords where information it holds does not match their tax records.
During August 2026, HMRC sent letters encouraging taxpayers to check whether they have undeclared income from rented property. HMRC says it receives information about landlords from third parties and other sources, including the tenancy deposit scheme.
The letters are being sent where that information does not match the taxpayer’s existing tax records.
What HMRC Is Asking Landlords to Do
Landlords who receive a letter are being asked to review their property income and check whether anything needs to be declared.
If there is income from renting out land or property that has not been reported, the taxpayer should disclose it to HMRC by following the steps and deadlines set out in the letter.
If the taxpayer believes there is nothing further to declare, they should still contact HMRC by the date specified in the letter.
HMRC also directs taxpayers to GOV.UK guidance covering the tax treatment of property income including the £1,000 property allowance.
Delaying Could Affect Penalties
The letter warns that HMRC may open a compliance check or criminal investigation into a taxpayer’s affairs.
If a disclosure is made after HMRC begins such action, it may be treated as a prompted disclosure. This can increase the level of penalties that may be charged.
For landlords receiving a letter, the key point is to review the position and respond within the deadline provided.
Capital Gains Tax and MTD Are Also Flagged
HMRC is also reminding landlords that Capital Gains Tax may be due where a let property has been disposed of.
The letter also highlights possible responsibilities under Making Tax Digital for Income Tax (MTD For IT).
Taxpayers with combined gross income from property and sole trader businesses of £50,000 for 2024/25 came within MTD for Income Tax from April 2026.
The threshold falls to £30,000 for 2025/26, bringing those taxpayers into MTD from April 2027. It falls again to £20,000 for 2026/27, with those taxpayers coming into MTD from April 2028.
What Landlords Need to Know
HMRC is comparing information received from third parties with taxpayers’ existing tax records.
Landlords who receive one of these letters should check whether all relevant property income has been declared and respond by the date stated.
The letter also serves as a reminder to consider any Capital Gains Tax position and whether MTD for Income Tax now applies.
For landlords, accurate records are becoming increasingly important as HMRC continues to compare declared property income with information it already holds.
Conclusion
For landlords, the message is straightforward. If HMRC contacts you, review your property income carefully and respond within the stated deadline.
With HMRC comparing third party information against tax records, keeping accurate records and making sure your reporting is complete is more important than ever.
