HMRC recovers £104m from landlord nudge letters — what it signals for undeclared side income

HM Revenue and Customs recovered £104m from landlord voluntary disclosures in 2025/26, according to Mortgage Solutions, reporting figures released under a Freedom of Information request. It is the third consecutive year the total has exceeded £100m, and brings the amount recovered since the Let Property Campaign launched in 2013/14 to £674m.

What the numbers show

Two figures moved in opposite directions, and the combination is the story.

Disclosures rose to 11,511, the highest since 2018/19, while the average recovered per disclosure fell from £13,713 to £9,063. That is what you would expect when a compliance programme widens from a small number of large cases to a large number of ordinary ones.

How nudge letters work

The mechanism is data-matching. HMRC cross-references information it already holds — including Land Registry records and other third-party sources — against what has been declared on tax returns. Where there is a mismatch, it writes to the taxpayer inviting a disclosure rather than opening a formal investigation immediately.

“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.”

— Andrew Park, tax investigations partner at Price Bailey, quoted by Mortgage Solutions, 28 July 2026

Park also noted that many of those receiving letters are what he described as accidental landlords — people who kept a property after moving in with a partner, inherited one, or let a home out while temporarily abroad. That framing matters. An undeclared liability is not, in itself, evidence of deliberate evasion, and HMRC's own campaign is structured around voluntary disclosure precisely because much of it is not.

Why this extends beyond landlords

The same data-matching approach now applies to income reported by online marketplaces and digital platforms. Platforms operating in the United Kingdom report seller information to HMRC under the OECD digital platform reporting rules, which means income from marketplace selling, short-term letting and freelance platforms sits in the same category as rental income: visible to HMRC through a third party, and checkable against a tax return.

If HMRC can already see income that has not been declared, the practical question becomes one of timing rather than probability.

What a disclosure involves

The Let Property Campaign is HMRC's route for landlords to bring rental income up to date. Broadly, a disclosure covers the undeclared income, the tax due on it, interest, and a penalty — and penalties are generally lower for an unprompted voluntary disclosure than for one made after HMRC has made contact, and lower again than where HMRC establishes deliberate behaviour.

The detail is genuinely case-specific. How many years are in scope, what expenses are allowable, and what penalty rate applies all depend on individual circumstances. This article does not attempt to answer those questions, and anyone in this position should take advice or read HMRC's own guidance before making a disclosure.

Where to start

• Work out roughly what the income was and what tax might be due on it.
• Gather records for the years concerned — rent received, allowable expenses, mortgage interest.
• Read HMRC's Let Property Campaign guidance, or the guidance for the relevant income type.
• Consider taking professional advice before contacting HMRC, particularly where several years are involved.

These figures and rules apply to the United Kingdom. Rental income is taxed under UK income tax rules; Scottish taxpayers pay Scottish rates of income tax on non-savings income.

Common questions

How much did HMRC recover from landlords in 2025/26?

£104m from voluntary disclosures, the third consecutive year above £100m. Since the Let Property Campaign launched in 2013/14, the total recovered is £674m.

What is an HMRC nudge letter?

A letter HMRC sends when its data-matching identifies a possible mismatch between information it holds from third parties and what has been declared on a tax return. It invites a voluntary disclosure rather than opening a formal investigation immediately.

Why did the average disclosure amount fall?

The average fell from £13,713 to £9,063 while the number of disclosures rose to 11,511. Andrew Park of Price Bailey described this as a trend toward larger numbers of smaller cases, as HMRC widens its checks beyond high-value cases.

Does this apply to income from online marketplaces?

The same data-matching approach applies. Digital platforms operating in the UK report seller information to HMRC under international platform reporting rules, so marketplace, short-term letting and freelance platform income can be checked against tax returns in the same way.

What should I do if I have undeclared rental or side income?

Establish what the income was and which years are affected, gather your records, and read HMRC's guidance for the relevant disclosure route. Penalties are generally lower for an unprompted disclosure. Where several years are involved, consider taking professional advice first.

In short

HMRC recovered £104m from 11,511 landlord voluntary disclosures in 2025/26, with the average case falling to £9,063. The pattern is more people owing less each, driven by data-matching against third-party records. The same approach now covers online marketplace and platform income, which makes an undeclared liability a question of when it surfaces rather than whether.

Based on reporting by Mortgage Solutions, 28 July 2026.