Resolving Undeclared Rental Income

The Challenge

The client had been receiving rental income for several years without realising that it was taxable or that a Self Assessment tax return was required. This went undiscovered until the client received a Let Property Campaign letter from HMRC, advising that HMRC was aware of the undeclared income.

The letter imposed a strict 90‑day deadline for the client to make a full disclosure covering the previous seven tax years, calculate the tax due, and settle all tax, interest, and penalties. The short timeframe, coupled with uncertainty over the total liability, caused significant stress for the client.

The Solution

We worked closely with the client to prepare a full and accurate disclosure under HMRC’s Let Property Campaign. This involved reviewing the rental income and allowable expenses for each tax year since 2017 and calculating the tax due, including statutory interest.

As HMRC penalties operate on a tiered system, we prepared representations to support a reduction in penalties, successfully appealing to lower them based on the circumstances of the disclosure. This significantly reduced the overall amount payable within the 90‑day deadline.

Alongside the disclosure, we also submitted the client’s current Self Assessment tax return and put processes in place to ensure her rental income would be correctly reported going forward.

The Value

By acting quickly and strategically, we helped the client meet HMRC’s deadline while minimising penalties and interest, reducing the total amount payable. The disclosure was completed accurately and efficiently, avoiding further HMRC scrutiny or potential escalation.

The client now has peace of mind knowing their tax affairs are fully up to date, with ongoing support in place to manage their rental accounts and future tax returns correctly.