Only 35,000 landlords in six years have answered a call from HM Revenue & Customs to come clean over their finances in return for lighter penalties.
In 2013, HMRC launched the Let Property Campaign urging 1.5 million landlords suspected of failing to declare their property profits to pay up to an estimated £500 million of lost tax.
Since then, only 35,099 have rallied to the call – only 2.3 per cent of the expected number – resulting in just £85 million in extra tax.
Responses peaked in 2015-16, when 10,000 landlords offered £25.2 million in unreported tax.
The data comes from a Freedom of Information response to accountants Saffery Champness that questioned HMRC over the campaign’s effectiveness.
James Hender, the 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.
“According to HMRC, 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 has been tightening the net on non-compliance and there are increasingly few opportunities for taxpayers to mitigate the risk of an investigation.”
HMRC has left the Let Property Campaign open for landlords to report undisclosed income.
“The Let Property Campaign is an opportunity for landlords who owe tax through letting out residential property, in the UK or abroad, to get up to date with their tax affairs in a simple way and take advantage of the best possible terms,” said an HMRC spokesman.