RURAL landlords who let houses and holiday property are the target of a new HMRC tax campaign.

Its Let Property campaign allows landlords to catch up where they have either avoided or inadvertently or deliberately not paid tax on rental profits.

HMRC offers lower penalties to those who come forward under the campaign, rather than waiting for HMRC to start a compliance check or an investigation.

David Chismon, director of Saffery Champness and member of its Landed Estates and Rural Business Group, said there are concessions for those who come forward and declare that they have unpaid or underpaid tax rather than wait to be found out.

He said: "The concessions include being able to advise HMRC how much tax you think you should pay, being able to agree to spread payments rather than paying in one lump sum, and also being able to make a disclosure at that time about any other unpaid tax, for example on untaxed earned income (profits), untaxed investment income (interest), and any capital gains."

Mr Chismon said those with undisclosed tax liabilities who do not come forward and who are investigated can expect HMRC to use the heaviest penalties which are up to 100 per cent of unpaid liabilities, or in the case of offshore income, 200 per cent.

Once HMRC issues a Disclosure Reference Number (DRN) then a period of three months is allowed to calculate and pay what is owed.

The new campaign affects all let property including rented housing, certain rooms for rent, and holiday property at home and abroad from which rental income is derived. It does not cover undisclosed rental profits on non-residential property such as shops, offices and garages.