Highest level since 2018/19

HM Revenue & Customs (HMRC) recovered £104 million from voluntary landlord tax disclosures in 2025/26, the third consecutive year it has generated over £100 million in tax yield, according to a freedom of information request by chartered accountants Price Bailey.

It shows that the number of voluntary disclosures made by landlords to HMRC rose 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 represents tax recovered from voluntary disclosures under the Let Property Campaign (LPC) and from other compliance-related activities, such as HMRC’s non-responder and discovery assessment work.

According to the Ministry of Housing, Communities & Local Government, there are approximately 2.4 million private landlords in the UK, which means the 111,843 disclosures to date made under the Let Property Campaign represent just under 5% of all UK landlords. The campaign has delivered £674 million since its launch in 2013/14.

Relentless data-matching

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 adds: “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 Since mortgage interest relief was withdrawn, taxable profit can appear even when there is little or no real‑world profit.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.”

The company said that landlords are being caught out by confusion around the distinction between capital and revenue expenditure and that recent tax changes have further complicated compliance.

These include Making Tax Digital for Income Tax, changes to CGT, and corporation tax changes.

“Reduced allowances, more frequent reporting and increasingly complex rules mean landlords should review their tax affairs carefully,” said Park. “Even unintentional omissions can lead to significant liabilities as HMRC’s compliance activity intensifies.”