HM Revenue & Customs (HMRC) recovered £104m from voluntary landlord tax disclosures in 2025/26, marking the third consecutive year it has generated over £100m in tax yield.
This is according to data obtained by Price Bailey, the chartered accountants.
The number of voluntary disclosures made by landlords to HMRC jumped 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 released under the Freedom of Information request 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 2.4m private landlords in the UK.
The 111,843 disclosures to date made under the Let Property Campaign represent just under 5% of all UK landlords.
Since its launch in 2013/14, the Let Property Campaign has brought in £674 million in total.
Price Bailey says HMRC is increasingly using Land Registry data to identify individuals who own multiple residential properties and may have undeclared rental income.
Andrew Park, Tax Investigations Partner at Price Bailey, comments: “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 Since mortgage interest relief was withdrawn, taxable profit can appear even when there is little or no real‑world profit.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 accountancy firm says that one area catching landlords out is ongoing confusion around the distinction between capital and revenue expenditure.
While replacing a kitchen like‑for‑like is tax deductible, for example, installing a significantly upgraded kitchen is not.
Price Bailey warns that recent tax changes have further complicated compliance for landlords operating without professional advice or digital systems: for example, Making Tax Digital for Income Tax requires quarterly submissions from April 2026 where combined gross property income and gross self-employment income exceeds £50,000 – dropping in steps to £20,000 from 6 April 2028.
The CGT annual exemption has been cut to £3,000, and higher CGT rates now apply to disposals after October 2024.
Many landlords have incorporated to preserve mortgage interest deductibility, but corporation tax now ranges from 19% to 25%, complicating decisions about profit extraction
Andrew Park concludes: “Reduced allowances, more frequent reporting and increasingly complex rules mean landlords should review their tax affairs carefully.”
This article is taken from Landlord Today