HMRC has begun issuing nudge letters to property landlords where information gathered from third-party sources does not match declared tax records.
The revenue authority receives data from a wide variety of statutory reporting sources, including tenancy deposit schemes, letting platforms, and local council records. HMRC is increasingly leveraging data analytics to pinpoint landlords whose tax returns may underreport rental income.
Key Areas Highlighted by HMRC
If you receive a letter, HMRC prompts you to review your tax position regarding:
Undeclared Rental Income: Ensuring all historic property income is fully accounted for.
Capital Gains Tax (CGT): Verifying that property disposals or sales have been declared within mandatory reporting deadlines.
Making Tax Digital (MTD) for Income Tax: Confirming compliance obligations as MTD rules expand.
Why You Shouldn’t Ignore an HMRC Letter
If you receive a letter from HMRC, do not ignore it. HMRC requests that landlords review their affairs and respond by the deadline stated in the letter.
If income was omitted: Making an unprompted or voluntary disclosure yields significantly lower penalties than waiting for an audit.
If everything is correct: You must still inform HMRC using the contact details provided to clear your record.
The risk: If HMRC opens a formal compliance check or criminal investigation later, any subsequent disclosure will be classed as “prompted,” leading to substantially higher financial penalties.
How Leftley Rowe Can Help
Receiving correspondence from HMRC can be stressful. If you have received a letter—or suspect your property income or capital gains disclosures need updating—contact Leftley Rowe immediately.
Our tax team can help you review your property accounts, prepare voluntary disclosures, and negotiate with HMRC on your behalf to minimize potential penalties.