HMRC Letters on Undisclosed Rental Income

Expert Solutions for Undisclosed Rental Income Letters from HMRC

Call Us: 0333 300 1887

Free Consultation

    By ticking this box, you agree that you have read (a) our terms & conditions and (b) our privacy policy.

    Uncover the Facts
    HMRC Letters on Undisclosed Rental Income

    If you’ve recently received a letter from HMRC regarding undisclosed rental income, you’re not alone. HMRC has become increasingly sophisticated in tracking down landlords who may have overlooked declaring their rental earnings. One crucial source of information for HMRC is data from government-approved tenancy deposit schemes.

    HMRC’s outreach, conveyed through letters addressing undisclosed rental income, serves as a gentle yet firm reminder to landlords to review and amend their tax returns for the relevant years. It aims to facilitate a corrective course of action rather than punitive measures.

    The Reality of Undisclosed Rental Income

    Many landlords inadvertently find themselves in the realm of undisclosed rental income, often labelled as “accidental landlords.” This situation arises when property owners, unable to sell, opt to rent out their property. Even if a deposit is lodged with a tenancy deposit scheme, not all landlords declare their rental income to HMRC.

    HMRC’s utilisation of tenancy deposit scheme data allows them to identify landlords who haven’t disclosed or accurately reported their rental income. If you’ve received an HMRC letter for undisclosed rental income, it’s a call to action to review and rectify your 2020/21 tax return, and if applicable, your 2021/22 return.

    The Numbers Game: How HMRC Calculates Rental Income

    Let’s illustrate how HMRC calculates rental income. Currently, landlords can request a maximum of five weeks’ deposit for new or renewed tenancies. Suppose you’ve taken a deposit of £1,500; HMRC may assume a weekly rental income of £300 or an annual income of £15,600.

    Let Property Campaign: A Lifeline for Second Property Owners
    Recognising Second Property Tax Obligations

    HMRC’s letters may also reference the Let Property Campaign, particularly for those with income from letting a second property. This campaign serves as a valuable resource for landlords who may have overlooked their duty to pay tax on rental income from additional properties.

    tenant deposit

    Embracing Compliance through the Let Property Campaign

    Participation in the Let Property Campaign involves a proactive approach. Landlords are encouraged to notify HMRC of their intent to disclose any undeclared income, gains, tax, or duty within 90 days. Seeking professional assistance, such as Morgan Reach Chartered Certified Accountants, are a prudent choice to navigate this process seamlessly.

    Facing the Consequences: Ignoring HMRC’s Letter

    Ignoring an HMRC letter can lead to significant consequences. Since the launch of the Let Property Campaign in 2013, over 58,000 disclosures have been made, resulting in approximately £250 million for HMRC. If you ignore a nudge letter, you risk facing penalties ranging from 10% to 100% of rental income, along with interest.

    Morgan Reach Chartered Certified Accountants: Your Trusted Partners in Tax Affairs

    If you find yourself dealing with undisclosed rental income or facing the Let Property Campaign, now is the opportune moment to regularise your tax affairs. Our experts at Morgan Reach Chartered Certified Accountants are ready to assist you. Contact us today to discuss your situation, understand your options, and ensure a smooth resolution with HMRC. Don’t let financial uncertainties linger – let us guide you toward a secure and compliant financial future.

    Account services

    We provide personalised accounting service to businesses of all sizes across a huge variety of industries.

    Business Consulting

    We understand business and how it works and have years of experience in helping businesses just like yours grow and become more profitable.

    Compliance Services

    You can rely on our range of compliance services to be a safe pair of hands to keep you on the right track and avoid penalties for late payment or submission.

    Tax Services

    Tax investigations and tax regulations could prove to be challenging. That’s why our specialist Tax team is here help you with your tax decisions

    Company Secretarial Services

    Morgan Reach offers a service through which you can use our registered office address for your business and we can deal directly with any correspondence.

    Tax returns

    Morgan Reach Personal and Corporate Tax Services help you and your business minimise the amount of tax you need to pay, using approved tax planning

    Looking for a High-Class Financial Services?

    Get A Free Quote


    Great reasons and promises we make to you which is why you should call us before deciding on your chartered accountant…

    Quoted in advance of the work and related to the value of work to be completed so that you know where you stand. That is unless you prefer to be charged on an hourly basis.

    You can call as much as you need without charge. It can be about anything – tax, business ideas, just someone to use as a sounding board or whatever you need. If you need help and we can provide it on the phone, it’s FREE.

    Whenever you wish to meet up, any meetings at our offices are always provided FREE of charge. You have the right to these whenever you feel the need. Just call us to schedule the meeting. We have offices conveniently located in Birmingham, Leciester and Kensington, London, UK.

    To identify all the tax planning opportunities you are not presently taking advantage of.

    As long as information is provided on time, accounts are guaranteed for completion within 30 days, phone calls and e-mails returned within 24 hours max but usually sooner.

    Relevant to business owners delivered to you by E-mail through our regular E-Tax Tips & News to help you pay less tax.

    We understand doing the paperwork can be stressful for many business owners who really just want to get on with running and building their business. So if you wish, we can take all the book-keeping, payroll and other paperwork off of you as well as the normal annual accounts and tax work.

    There’s no technical speak from us. We speak to you openly and honestly and promise not to blind you with jargon. We want you to feel comfortable to pick up the phone to us whenever you need, for whatever you want and know you’ll get good sound understandable advice. We will work with you in the way that suits you – in person, on the phone or online.



    Morgan Reach

    Sportszone is a small family business. Kamran Shaikh of Morgan Reach was recommended to us by a previous accountant that we had used many years ago. They could not have come more highly praised! A meeting ensued and we have never looked back. Work is always done promptly and efficiently The staff are polite and welcoming. Most accountants ‘do exactly what it says on the tin’, but Kamran Shaikh does that and much more! You are made to feel a part of a family but are secure in the knowledge that you are in safe and capable professional hands.

    Rani | Sportszone

    Problems that occur are handled efficiently. Having confidence in a professional and personal working relationship, let’s me get on with other issues knowing that I have backup when needed.

    Richard Moore

    Morgan Reach were outstanding in setting up my company for VAT. Kamran and his team ensured everything was set up appropriately whilst explaining each step along the way. Even when HMRC conducted a random audit, Morgan Reach ensured HMRC went away satisfied.

    Amar Verma

    Contact Us

      By ticking this box, you agree that you have read (a) our terms & conditions and (b) our privacy policy.