HMRC Third-Party Data Checks Target Landlords

HMRC has begun writing to landlords where the property income information it holds does not appear to match the figures reported on their tax returns. HMRC can use information from third parties to carry out these checks, so if you receive a letter, it is important to review your records and tax position carefully.

This information can come from tenancy deposit arrangements and other reporting systems. The simplest way to stay prepared is to keep clear and complete records of your rental income, allowable expenses and any transactions relating to your properties.

Received a Letter from HMRC?

First of all, don’t ignore it. Check which tax years and properties the letter relates to, compare the details with your records and make a note of the response deadline. If you discover that income or tax has been missed, you may need to tell HMRC and make a disclosure. If you believe your returns are correct, you should still reply and keep the supporting records that explain your position.

Acting quickly can make a real difference. The timing and quality of a disclosure may affect any penalty charged, while leaving undeclared income unresolved could lead to a compliance check and further action in more serious cases. It’s a good idea to obtain professional advice before sending figures or making statements to HMRC.

What Else Should You Check?

While you’re reviewing your records, it’s sensible to look at the wider picture too. If you have sold or disposed of a property, check whether you had any Capital Gains Tax reporting or payment obligations. You should also consider when Making Tax Digital for Income Tax will apply to you. The requirements are being introduced in stages for those with qualifying income of more than £50,000 from 6 April 2026, more than £30,000 from 6 April 2027 and more than £20,000 from 6 April 2028. If you fall within the rules, you’ll need compatible software to keep digital records, send quarterly updates and submit your tax return.

If you’ve received a letter from HMRC, or you’re worried that some of your property income may not have been reported correctly, please get in touch with us at enquiries@teamjs.co.uk. We can review your circumstances, explain the next steps and help you make any disclosure that may be needed.