Last updated: 14 October 2026
What should you do if HMRC sends you a letter about rental income?
Read it carefully and respond by the deadline. HMRC sends “nudge” letters to landlords when its data, from letting agents, deposit schemes, Land Registry and digital platforms, suggests rental income hasn’t been declared or has been under-declared. The letter usually asks you to check your returns and either confirm they’re correct or put things right. Ignoring it can lead to an enquiry and higher penalties.
Types of letter
| Letter | What it means | What to do |
| One-to-many nudge letter | HMRC thinks you may have undeclared income | Check returns; disclose if needed |
| Certificate of tax position | HMRC asks you to confirm in writing your returns are correct | Sign only if it’s true |
| Enquiry notice | Formal check into a specific return | Reply in time, with records |
| Discovery assessment | HMRC has raised tax for an earlier year | Appeal within 30 days if you disagree |
If your returns are correct
Reply to confirm, if asked. Keep records showing your income and expenses. If you have a mortgage, joint ownership or rent-a-room income, explain why the figures may differ from what HMRC expects.
If you haven’t declared everything
- Use the Let Property Campaign to make a voluntary disclosure
- You have 90 days after notifying to pay
- Penalties are usually lower than if HMRC opens an enquiry
- Interest is charged at 7.75% on late tax
Example
Martin receives an HMRC letter in 2026 saying its data shows he has a rental property. He did let a flat from 2021 to 2024 but didn’t declare it, believing his mortgage interest wiped out the profit. His accountant shows that, after the 20% finance cost credit, he had small taxable profits. He makes a disclosure through the Let Property Campaign, paying £2,300 tax, interest and a small penalty.
Why HMRC is sending more letters
- Platform reporting rules mean Airbnb and others report income annually
- Letting agents and deposit schemes provide data
- Making Tax Digital for Income Tax started in April 2026 for landlords with qualifying income over £50,000
Is the letter genuine?
HMRC letters include your UTR or National Insurance number and never ask for bank details by email or text. If in doubt, check through your personal tax account or call HMRC on a number from gov.uk.
Get help early
An accountant can calculate the figures, deal with HMRC and negotiate penalties. Acting early usually reduces costs.
Common mistakes
- Signing a certificate of tax position without checking every year
- Replying with figures from memory instead of records
- Waiting for a second letter before acting
- Forgetting income from a property let to family or friends, which is still taxable if there is a profit
Keep a copy of the letter and your reply, and note the date you sent it.
Frequently asked questions
Do I have to reply?
If the letter asks for a response, yes.
What if I made a loss?
You may still need to file returns to record it.
Can HMRC look back many years?
Up to 20 years for deliberate behaviour.
What if the property was jointly owned?
Each owner reports their share.
Related: disclosing undeclared rental income, Airbnb landlords and HMRC and lettings relief claims.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with replying to HMRC. See our landlord accountants service, or contact us for a free, no-obligation quote.
This page is general guidance based on HMRC rules for the 2026/27 tax year, checked against gov.uk on 14 October 2026. It is not personal advice, so speak to an accountant about your own situation.
