In 2025, HMRC sent over 10,000 nudge letters to landlords under the Let Property Campaign alone. In 2026, that number has risen sharply. If you have received one, or if you have rental income that you have not fully declared, this article explains exactly what is happening, why it is happening now, and what you must do — and must not do — next.
Why HMRC Is Writing to Landlords Right Now
The scale of the Let Property Campaign activity in 2026 is not coincidental. It is the direct result of a step-change in the quantity and quality of data HMRC now holds on the UK's landlord population.
DAC7 platform reporting. From 1 January 2024, digital platforms operating in the UK — including Airbnb, Booking.com, Vrbo, Rightmove, Zoopla, and similar services — have been required under the OECD's DAC7 rules to report annual income data for all UK landlords who use their platforms to HMRC. By January 2026, HMRC had completed its first full cycle of this data and cross-referenced it against 2024/25 Self Assessment returns. Where the platform income and the declared property income do not reconcile, the discrepancy flags automatically in HMRC's Connect system.
Tenancy deposit scheme matching. If you have taken a tenancy deposit and registered it with one of the required deposit protection schemes — as all landlords in England must — that data is available to HMRC. A deposit of, say, £1,500 suggests a monthly rent of approximately £1,500 and annual rental income of approximately £18,000. If no property income appears on your tax return, the mismatch is flagged.
Land Registry records. HMRC routinely cross-references Land Registry data to identify individuals who own residential property beyond their main home. Owning a second property is not itself evidence of rental income, but it is a signal that prompts further scrutiny.
Mortgage data. Buy-to-let mortgages are reported to HMRC. A landlord paying a buy-to-let mortgage who declares no rental income is a clear anomaly.
The result of all this data flow is that the population of landlords with undeclared rental income who have not yet received a nudge letter is shrinking rapidly. HMRC no longer needs to conduct random investigations — it can identify specific individuals whose declared income is inconsistent with the data it already holds.
What Is the Let Property Campaign?
The Let Property Campaign (LPC) is HMRC's voluntary disclosure scheme for residential landlords with undeclared or under-declared rental income. It has been open since 2013, remains active in 2026, and has no announced end date.
The LPC allows landlords to come forward, calculate what they owe, and pay it — along with interest and a reduced penalty — before HMRC launches a formal investigation. The key word is "voluntary": coming forward of your own accord, before HMRC contacts you, attracts significantly lower penalties than disclosing only after you have received a nudge letter (which is treated as a "prompted" disclosure) and very much lower penalties than waiting for a formal enquiry.
What a Nudge Letter Actually Is — and Is Not
A nudge letter (formally called a "One to Many" letter) is not a formal tax investigation. It is a pre-enquiry communication sent in large batches to taxpayers whose data profile raises a concern. It carries no formal statutory powers, no legal obligation to respond in a particular way, and no immediate enforcement consequence.
What it does signal is that HMRC already has information that it believes is inconsistent with your declared tax position. You are being offered a final opportunity to resolve the matter voluntarily, on the most favourable available terms, before HMRC decides to open a formal enquiry.
A typical nudge letter about rental income presents three options:
- You have declared property income but not the full amount
- All your tax affairs are up to date and correct
- You have not declared any property income
If you select option 2 and you are wrong, HMRC will treat any subsequent discovery as a prompted deliberate error — attracting significantly higher penalties than an early voluntary disclosure. If you ignore the letter entirely, HMRC will escalate to a formal investigation. In either case, the outcome is worse than coming forward promptly.
The Penalty Comparison: Before, During, and After
The single most important reason to act quickly is the penalty differential between unprompted and prompted disclosures.
Interest on unpaid tax also accrues from the date the payment should have been made. The longer the delay, the more interest accumulates on top of the penalty.
How Far Back Can HMRC Go?
The period HMRC can investigate depends on the nature of the error:
- Up to 4 years if you registered for Self Assessment on time and took reasonable care but still paid too little
- Up to 6 years if you registered but were careless
- Up to 20 years if you failed to register for Self Assessment at all
Many landlords who have been letting a property for five or ten years without declaring the income face an exposure across the full 20-year window. The total tax, interest, and penalty across that period can be substantial — but a well-structured voluntary disclosure can still dramatically reduce the overall settlement compared to what a formal investigation would produce.
What to Do if You Receive a Nudge Letter
Step one: Do not respond directly to HMRC without professional advice. The letter will typically ask you to complete and return a Certificate of Tax Position within 30 days. Do not sign and return this document without having a qualified tax adviser review your position first. A signed certificate that is incorrect — even accidentally — has serious consequences.
Step two: Contact your accountant immediately. CoreAcc can carry out a rapid review of your rental income history, identify the years affected, calculate the tax, interest, and probable penalty range, and advise you on whether a disclosure is necessary and how to structure it.
Step three: If a disclosure is required, notify HMRC promptly. Even if the nudge letter has already made the disclosure "prompted" rather than "unprompted," there remains a meaningful difference between disclosing quickly and cooperating fully (which attracts lower penalties within the prompted range) and delaying or being incomplete (which attracts higher ones).
Step four: Use the Let Property Campaign process. Once you notify HMRC of your intention to disclose under the LPC, you receive a unique disclosure reference number and a 90-day window to calculate and submit your full disclosure, together with payment of the tax, interest, and penalty. CoreAcc can manage this entire process on your behalf.
Common Mistakes That Create Rental Income Tax Problems
Many landlords who receive nudge letters are not deliberate evaders — they have made genuine mistakes that have compounded over time. The most common are:
Misunderstanding the mortgage interest restriction. Since April 2020, individual landlords cannot deduct mortgage interest as a business expense. Instead, they receive a 20% tax credit. Landlords who have continued to deduct full mortgage payments from their rental income have been understating their taxable profit for up to six years.
Confusing Rent-a-Room with other letting. The Rent-a-Room Scheme allows up to £7,500 per year of income from renting a room in your own home to be received tax-free. It does not apply to a separate property that you let out — even if you previously lived there.
Not knowing you needed to register for Self Assessment. If you have rental income above £1,000 per year, you are required to register for Self Assessment with HMRC. Many first-time landlords, particularly those who inherited a property or began letting a home when they moved abroad, do not realise this applies to them.
Missing the October 5 notification deadline. If you first receive rental income in a tax year, you must notify HMRC by 5 October following the end of that tax year. Missing this deadline removes your eligibility for the favourable 4-year lookback and exposes you to the full 20-year assessment window.
Have you received a nudge letter, or do you have rental income that may not have been fully declared? Contact CoreAcc Accountants confidentially today. We help landlords across Hertfordshire and North London navigate voluntary disclosures and HMRC enquiries efficiently and without unnecessary cost.
This article was last reviewed in July 2026. It does not constitute legal advice. If you have received a formal HMRC enquiry under section 9A TMA 1970, you should seek specialist advice immediately.
