Britain’s landlords are facing a renewed tax crackdown as a result of huge levels of non-compliance across the rental sector, it is claimed.

Former HMRC inspector Amit Puri (pictured) has analysed the 2025 data from HMRC’s Let Property Campaign. The campaign was set up by HMRC in 2013 to target landlords after it estimated that 1.5 million of them had underpaid or failed to pay up to £500 million in tax in one year alone.

Since then, the Private Rented Sector has expanded considerably, yet the Let Property Campaign has collected just £250 million in its over a decade-long crackdown, which is a long way off its original expectations.

This has led HMRC to step up its activities, with tax crime prosecutions reaching a three-year high. At the same time, Chancellor Rachel Reeves’ attempts to close the £39.9 billion tax black hole have meant HMRC is currently recruiting 5,000 more tax inspectors.

Making Tax Digital

And the intensified crackdown is likely to be aided by new Making Tax Digital requirements. From April 2026, landlords earning over £50,000 per year must comply with quarterly digital reporting, providing HMRC with the kind of oversight that will help it pick up rental income that was previously going under the radar.

Puri, who spent over a decade at HMRC before founding London-based Pure Tax, says the Let Property Campaign targets various forms of rental income non-compliance, from failure to declare income from traditional buy-to-let properties to holiday lets, and short-term accommodation rentals, which together generate £44.7 billion per year.

Making any kind of tax disclosure to HMRC can be an uncomfortable experience.”

The data reveals that the highest concentration of undeclared rental income occurs in the South East, London, Leicester, and Birmingham regions, where property values create significant tax obligations. According to Puri, though, HMRC’s compliance teams tend to focus their scrutiny on urban areas and high-value property markets.

Puri told National World: “Making any kind of tax disclosure to HMRC can be an uncomfortable experience.”

He advises, though, that penalties for voluntary disclosures range from 0% to 35%, compared to up to 100% for those caught during investigations without prior disclosure.