Landlords pay record £107m to HMRC as unpaid tax bill doubles

HMRC collected an extra £107 million in unpaid tax from landlords during the 2024-25 tax year. 

The extra revenue was generated through the Let Property Campaign, with the average landlord paying back almost £14,000. 

The data was revealed in a freedom of information request made by accountancy firm Price Bailey. 

Landlords targeted in HMRC tax crackdown

The £107 million collected in 2024-25 marked a slight increase on 2023-24 when landlords paid back just over £106 million.

However, it represents a rise of almost 100 per cent when compared to the £65.4 million collected in 2022-23 and is almost three times the 2021-22 total of £39.9 million. 

The average disclosure per landlord (£13,713) was the highest amount since the Let Property Campaign launched and was 44 per cent higher than the £9,505 collected in the previous tax year.

On the whole, the campaign has brought an extra £570 million in unpaid landlord tax, according to the freedom of information request.

What is the Let Property Campaign?

The Let Property Campaign gives landlords who have underpaid tax the opportunity to come forward to HMRC. By doing so, they can potentially benefit from lower penalties.

Under the scheme, HMRC can: 

• claim back up to 20 years of underpaid tax
• fine landlords up to 100 per cent of any unpaid tax, 
• fine landlords up to 200 per cent for cash held offshore

If a landlord has made a genuine error with their tax return, HMRC will only reclaim up to six years of unpaid tax. Their fine could also be reduced or cancelled.

How can landlords come forward?

HMRC uses data to identify landlords it suspects of underpaying tax. It then sends them nudge letters encouraging them to check their tax affairs.

Landlords with undisclosed or unpaid rental income are advised to contact HMRC immediately. 

They then have 90 days to work out and pay what they owe. If they don’t act quickly, they could face higher penalties or face criminal prosecution.

Key tax changes landlords need to be aware of

Tax remains a thorny issue for landlords. More than one in 10 (14 per cent) said rising taxes are their single greatest challenge, according to the Simply Business Landlord Report 2025. On top of this, over a third (34 per cent) said reducing the tax burden is the most important action the government could take to support landlords. 

The rapidly-changing and complex nature of landlord tax increases the chances of accidental underpayments. This is particularly the case for accidental landlords or those who have only recently started letting property. 

Here are some of the most important tax measures landlords need to be aware of:

• Making Tax Digital for income tax – from April 2026, landlords who earn more than £50,000 a year will need to make quarterly tax returns using government-approved software
• Section 24 – the restriction of buy-to-let mortgage tax relief, which has reduced profits for many and caused a rise in landlords starting buy-to-let limited companies

And with the Autumn Budget 2025 on the horizon, it’s been rumoured that the Treasury may make changes to taxes paid by landlords. These could include:

• replacing stamp duty with an annual property tax
• charging National Insurance on rental income
• increasing capital gains tax rates or reducing the tax-free allowance
• extending the freeze on income tax thresholds
• increasing the inheritance tax threshold or rate

More guides for landlords

• Renters’ Rights Bill – what do landlords need to know?
• Decent Homes Standard: 1 in 5 properties need improvements
• Section 13 rent increase: a guide for landlords
• Allowable expenses for landlords – what can you claim?