Landlords could face further tax scrutiny under government plans to give HMRC more frequent and detailed information about rental income.

A new government consultation proposes requiring letting agents and tenancy deposit protection schemes to report property income data regularly, rather than only when the tax authority requests it. It is considering monthly or quarterly reporting, with information potentially required within a month, two weeks, or less of the end of each reporting period.

HMRC currently issues more than 10,000 notices each year to get rental income information from agents and deposit protection schemes, with data holders given 60 days to respond, meaning that information can arrive more than 13 months later.

These new plans would allow HMRC to get information without issuing individual requests for each reporting cycle, helping it identify potential undeclared rental income earlier. Agents and deposit schemes could also have to collect and report additional ‘tax identifiers’, such as landlords’ National Insurance numbers, company registration numbers and Unique Taxpayer References. For existing clients, organisations would have to make “reasonable efforts” to obtain the information.

Expenses

HMRC also wants views on collecting other details such as landlords’ dates of birth, tenancy dates, gross rental income, management fees, allowable expenses and property identifiers.

The government says more accurate data would help taxpayers get their tax right first time, improve tax administration and support its move towards a more digital tax system. It could also help identify landlords who should be completing Self-Assessment returns but aren’t registered.

Its consultation explains: “HMRC continues to struggle to close the tax gap for property income, due in part to the fact that data can be incomplete, difficult to match accurately to taxpayer records, and is often received too late to support timely compliance interventions.

“High-quality, timely and identifiable third-party data will support digital prompts and nudges and will present opportunities to improve the customer experience for landlords in MTD.”

Obligations

It acknowledges that the reforms will create new obligations for many letting agents, including businesses that don’t currently report information to the department.

Propertymark says it recognises the importance of accurate and timely tax reporting, but that any new requirements must be proportionate, practical and properly considered.

Head of policy and campaigns, Timothy Douglas, tells LandlordZONE: “Letting agents already operate in a heavily regulated environment and are managing a growing range of compliance responsibilities. Any additional obligation to report property income directly to HMRC is likely to create further administrative pressures and costs.

“If these measures come into fruition they must work alongside existing agency practice, avoid unnecessary duplication and be workable. We will be working closely with our members to respond to the consultation.”  

The consultation closes on 20 January 2027.

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