HMRC’s Let Property Campaign, which provides an opportunity for landlords to come forward and report undeclared rental income and expenditure to HMRC, has so far led to disclosures from less than 3% of its original target, according to new data obtained by top 20 accountancy firm Saffery Champness through a Freedom of Information request.

When the government launched the Let Property Campaign in 2013, it estimated that up to 1.5 million landlords had underpaid or failed to pay up to £500m in tax between 2009 and 2010.

The initiative originally targeted those that have multiple properties, specialist landlords who rent to students, people with holiday lets and those who let houses in multiple occupation.

In the five years since the campaign started, 35,099 people have made voluntary disclosures to HMRC, only 2.3% of the individuals originally identified, while of the estimated £500m in underpaid taxes, the campaign so far has recovered approximately 17.1%, or £85m, of that amount overall.

James Hender, head of private wealth at Saffery Champness, said: “From the outset, the Let Property Campaign was always looking much more widely than just traditional landlords. It also targets those who may have become accidental landlords – such as those with holiday lets or multiple occupations.

“The tax system is becoming more complex and the burden is shifting further towards the taxpayer: this inevitably means individual mistakes and misunderstanding can happen. Looking at the data from the FOI, of the large number of tax payers who stated that they had either failed to notify HMRC of their original liabilities or hadn’t taken reasonable care, many would likely have been unaware that they owed anything at all.

“According to HMRC’s estimates there are clearly many more landlords who have additional tax to pay, but have yet to come forward.  If this is the case, then these people would be well advised to contact the taxman sooner rather than later.

“HMRC have been tightening the net on non-compliance and there are increasingly few opportunities for taxpayers to mitigate the risk of an investigation.”

The freedom of information request also revealed the reasons given for disclosures, with the vast majority being due to either a ‘failure to notify HMRC’ or ‘Taken reasonable care’.

Lucy Brennan, partner at Saffery Champness, said: “We are picking up signals from the Treasury that their long-term forecasting for tax revenues shows that some of the biggest money spinners for the last century, including tobacco, alcohol and fuel duty, are due to decline due to changing lifestyle habits.

“There seems to be a pattern emerging of HMRC targeting other sources of tax revenues, with property being an asset that they could look to levy additional taxes on. This is already in motion, with a raft of tax changes set to hit second home owners and accidental landlords over the next year or so.

“You only need to look at countries such as France and the US to see that, in comparison, UK property is a relatively lightly taxed asset. The difficulty with bringing in new property taxes is that it is political dynamite and any significant reform could provoke a backlash from property owners of all stripes.”

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