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HMRC · Settlement · 2026/27

HMRC settlement opportunities (2026/27)

HMRC publishes several formal disclosure facilities for taxpayers who want to come forward voluntarily. Each is targeted at specific situations — UK rental property, overseas income, cryptoassets, contractor loans, or general undisclosed income. Choosing the right facility, and disclosing on the best terms, can mean the difference between a penalty of 0-30% and 100%+. This guide covers the main 2026 routes.

5-minute read

HMRC disclosure routes in one paragraph: if you have undisclosed UK tax to pay, voluntary disclosure (before HMRC writes to you) generally gives the lowest penalties — often 0-30% on top of the tax owed. HMRC offers specific facilities depending on what you're disclosing: Let Property Campaign for rental income, Worldwide Disclosure Facility for offshore income, Crypto Asset Disclosure for crypto, and the general Digital Disclosure Service for everything else. Each has its own portal, scope, and terms. Pick wrong and you may pay materially higher penalties.

Why disclosure is almost always better than waiting

The penalty difference between voluntary (unprompted) and prompted disclosure is substantial:

BehaviourUnprompted (you came forward)Prompted (HMRC contacted you first)
Careless mistake0-30%15-30%
Deliberate20-70%35-70%
Deliberate + concealed30-100%50-100%

For a typical £20,000 underpayment due to careless omission, unprompted disclosure might cost £0 penalty (taking reasonable care defence), prompted disclosure starts at £3,000 penalty.

HMRC's information advantage in 2026 (CRS, FATCA, platform reporting, Connect AI) means undisclosed positions become discovered positions sooner. The window for unprompted disclosure narrows every year.

The five main 2026 disclosure routes

1. Digital Disclosure Service (DDS)

The default route for most undisclosed UK tax.

2. Let Property Campaign

Specifically for undeclared rental income from UK property.

3. Worldwide Disclosure Facility (WDF)

For undeclared offshore income, gains, or assets.

4. Crypto Asset Disclosure

For undeclared crypto gains, income, or other cryptoasset activity.

5. Contractor Loan Scheme settlement

For users of disguised remuneration loan schemes.

How to choose the right facility

If your undisclosed tax involves...Use...
UK rental property onlyLet Property Campaign
Offshore income (bank interest, dividends, foreign property)Worldwide Disclosure Facility
Cryptoassets onlyCrypto Asset Disclosure
Mix of UK and offshore (most cases)WDF (broader scope)
Contractor loan schemeDisguised Remuneration settlement
Other / unsureDigital Disclosure Service
You've already had a COP9 letterCDF only (NOT a normal disclosure route)

The disclosure process — step by step

  1. Register your intent. Submit a notification through the relevant facility's portal. This protects you with "unprompted" status from that date.
  2. Calculate the tax. Pull bank statements, transaction records, fund statements. Compute income tax, NI, CGT, etc. for each year.
  3. Calculate interest. HMRC official rates compounded daily. Approximate at 3-5% per year for recent years.
  4. Calculate penalty. Apply behavioural reduction based on quality of disclosure.
  5. Submit disclosure. Online form with detailed schedules, supporting documents.
  6. Pay. Usually within 90 days of submission, or arrange Time to Pay.
  7. Receive Letter of Acceptance. Closes the matter for the disclosed period.

Worked example: Let Property Campaign

Mrs T has been renting out a flat in Birmingham since 2018 without declaring. Annual rental: £9,600. Allowable expenses (insurance, maintenance, agent fees, mortgage interest): £4,000 net = £5,600 profit per year. She's a higher-rate taxpayer.

She makes voluntary unprompted disclosure in May 2026.

If she'd waited for HMRC to contact her (which would have happened — HMRC matches Land Registry and council tax data routinely), penalties would have been ~30% = £4,704 instead of £1,568. Difference: £3,136 saved by voluntary disclosure.

What happens after disclosure

HMRC reviews the disclosure within 3-6 months. Possible outcomes:

The Letter of Acceptance protects you for the disclosed matters — they can't be reopened later unless HMRC discovers fraud not disclosed.

Common disclosure mistakes

Sources

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