HMRC is seeking a new power to force landlords and other taxpayers to revise suspected errors in tax returns.
Draft legislation would allow HMRC to treat uncorrected mistakes as deliberate errors if taxpayers fail to act after becoming aware of them.
The change is in the draft Finance Bill 2026-27 papers.
The change would introduce a formal Customer Correction Notice. The notice would let HMRC require a taxpayer to review a return, correct any inaccuracies, make a disclosure, or explain why no correction is needed.
The measure is not yet in force. The HMRC policy paper says it will take effect on or after a future appointed day.
Don’t ignore tax return errors
The CCN is another layer of tax compliance complicating accounts and tax returns on top of the newly introduced Making Tax Digital programme.
Even if an error is an innocent mistake, the draft rules show the risk rises sharply if it is spotted later and not dealt with quickly.
The draft policy paper explains that the reform would oblige a taxpayer to take corrective action once they become aware of an error in a return or related document.
HMRC says that where a taxpayer becomes aware of an error and does not take reasonable steps to correct it or notify HMRC, the error could be treated as deliberate.
Meanwhile, accountants Price Bailey warn HMRC is casting its net wider and detecting more landlords with unpaid tax bills.
£100m recovered from landlords
Under the Let Property Campaign, landlords handed over more than £100 million in unpaid tax to HMRC last year, with the average payment coming to more than £9,000.
HMRC recovered £104.3 million from 11,511 property owners in 2025-26, the highest number of disclosures in seven years, after nudge letters were issued by HMRC.
For the third year in a row, the final figure has totalled more than £100 million that would otherwise have been lost to tax cheats. The 2025-26 total was nearly three times the £36.8 million recovered in 2019-20. The Let Property Campaign started in 2013-14.
The campaign reduces penalties for landlords settling unpaid taxes from previous years.
Nudge letters
Andrew Park, a partner at Price Bailey, said:
“HMRC’s data‑matching capability has become relentless. Most voluntary disclosures are now prompted by HMRC nudge letters, and we are seeing a clear trend in larger numbers of smaller cases.
“HMRC is casting the net wider and catching landlords who may only have modest rental income but still have undeclared tax liabilities.”
HMRC said:
“The Let Property Campaign is an opportunity for landlords to disclose any unpaid tax in a simple, straightforward way and take advantage of the best possible terms.
“Our nudge letters help customers pay the correct amount of tax. By paying correctly and on time, they avoid penalties and interest.”
