HMRC Nudge Letters Are Landing on STL Operators: What to Do in the 90 Days You Have to Respond

In short: HMRC's Let Property Campaign has recovered nearly £550m from residential landlords since 2013, with 12,660 disclosures made in 2025/26 alone — more than double the prior year. STL operators are now specifically targeted using DAC7 platform data. If you receive a nudge letter, you typically have 90 days to respond, and the choice you make in those 90 days materially changes the penalty rate you face.

HMRC's compliance push against landlords with unreported rental income is not new. The Let Property Campaign has been running since 2013 and has, per HMRC's most recent published figures, recovered close to £550 million in tax, interest and penalties. What is new is the pace and the targeting.

In 2025/26 alone, HMRC received 12,660 Let Property Campaign disclosures — more than double the 2024/25 figure, and roughly 2.5x the pre-pandemic average of around 5,000 per year. The increase is a direct function of two things: the DAC7 platform data drop (covered in our DAC7 analysis), and HMRC's decision to invest heavily in the compliance yield from that data.

What a nudge letter actually is

A nudge letter is a pre-enquiry behavioural prompt. It is not a formal enquiry under s.9A TMA 1970. HMRC has information that suggests there may be undeclared income, and it wants you to either come forward voluntarily or explain why the information does not require action.

For STL operators specifically, the letters we are seeing generally fall into three types:

Type 1: General nudge. "We have information that suggests you may have rental income from property. If you have not declared this, please make a disclosure via the Let Property Campaign." Standard wording; no specific figures quoted.

Type 2: Property-specific nudge. Names one or more specific properties (often from Land Registry cross-reference) and asks about income from them. Sometimes lists platform-reported income figures.

Type 3: Discrepancy-specific nudge. Names a specific tax year and a specific figure. "We have received information that you received £X of rental income from platform Y in tax year Z. Our records show you declared £[lower figure]. Please review and either amend your return or explain the difference."

What to do in the 90 days

Step 1: Do not ignore it. Silence is treated by HMRC as prompted knowledge for penalty purposes — meaning your penalty rate will be assessed at the higher "prompted disclosure" band rather than the lower "unprompted" band, whether or not you eventually engage.

Step 2: Establish whether the letter is right. Some nudge letters are wrong. If HMRC has misidentified you, or the platform income they are quoting was on a property you did not own in that period, or your return already captured the income under a different heading (e.g. incorporated portfolio reported on CT600 rather than SA), the answer is a factual response with evidence.

Step 3: If the letter is right, get advice before responding. The response you give within 90 days sets the framework for what follows. In our experience, operators who respond alone tend to concede more than they need to and less than HMRC would ultimately press for — either way, worse than the advised outcome.

Step 4: Use the Let Property Campaign for the actual disclosure. LPC disclosures secure defined penalty rates and, for genuine unprompted disclosures with a reasonable-care characterisation, can be as low as 0%. For prompted disclosures (i.e. where a nudge letter has landed), penalties typically run 18-21% of the unpaid tax. For deliberate concealment they can go up to 100%. The gap between prompted and unprompted matters — and it is why acting proactively, before a letter arrives, is worth so much.

Where the numbers come from

HMRC's data pool for this exercise is now substantial. It draws from:

• DAC7-equivalent platform reports (Airbnb, Booking.com, Vrbo, others)
• Land Registry — property ownership and transactions
• Council tax records — via specific council data-sharing agreements
• Tenancy Deposit Schemes — for long-term let cross-checks
• Estate agent commissions paid to letting agents
• HMRC's own historic return data — sudden gaps in property income being flagged for enquiry

For an STL operator whose income has been sitting on Airbnb for years without appearing on a self-assessment, the arrival of a nudge letter should not be a surprise — it is the outcome of a system that now works.

What operators should not do

Do not submit an amended return without professional advice. An amended return is a formal declaration; getting it wrong under time pressure creates further problems.

Do not claim the platform income was capital rather than income. HMRC has heard this argument and does not accept it for standard STL letting.

Do not assume that closing the letting business now will end the exposure. Historic years remain open — depending on the "behaviour" HMRC characterises, they can look back four years (careless), six years (deliberate), or twenty (deliberate and concealed).

What operators should do

1. If you have already received a letter, get advice within days of receipt, not days before the 90-day expiry.
2. If you have not received a letter but your prior returns may not reflect the platform data, act proactively. The unprompted LPC route is meaningfully cheaper than the prompted route.
3. If your current returns are compliant, get a reconciliation done against the DAC7 data anyway. The cost of confirming you are clean is a fraction of the cost of finding out you were not.

The HMRC compliance environment for STL operators has genuinely changed. Operators who behave as if it has not are the ones getting the letters.

Book a free consultation to discuss whether you should be making a disclosure — or to review a nudge letter you have already received.

Sources: UK Landlord Tax — Let Property Campaign £550m recovered; Property Tax Partners — HMRC nudge letter response playbook; Holden Associates — HMRC undeclared rental income 2025 guide; Felix Accountants — Let Property Campaign penalties.