The campaigns, led by HMRC, aim to “force better tax compliance amongst owners of holiday homes”, according to accountants and business advisors, Moore.
The amount declared to HMRC increased by 17% to £912m last year, up from £781m the year before.
The number of taxpayers who declared rental income from overseas property also increased to 81,000 last year, up from 78,000 the year before.
According to Moore, the rise in declared income from overseas property suggests that HMRC’s “tactic of using the increased threat of tax investigations as a credible deterrent are working”.
It comes as HMRC has bulk mailed warning letters to taxpayers that have income from offshore assets, such as property. The letters warn that HMRC is aware the taxpayer has offshore assets, asking them to confirm any income that they receive.
It identifies taxpayers with offshore property through requesting data, such as foreign bank account statements or mortgage statements, from 100 overseas authorities. It also collects data from UK-based websites that advertise overseas holiday rentals.
In addition, HMRC investigators also monitor social media accounts of people they suspect of owning an overseas rental property for evidence.
Penalties for undeclared property income from holiday homes is up to 200% of the amount of tax HMRC believes is owed.
Matthew Grief, associate at Moore, said: “HMRC know that the British have almost as strong a love affair with owning holiday homes as we do with traditional BTL.
“They’re determined that any income from letting out property overseas is properly taxed. They have been putting owners under more and more pressure and that is paying off –declarations of rental income are going up a quite a clip.”
He added: “They’re wise to do that as the ability of HMRC to identify owners of holiday homes is becoming ever more precise just from a process of data mining all the information they receive directly from banks and financial institutions in countries like Spain, France, Portugal and Italy.
“The fines that HMRC can impose are very painful. One way out is to make a voluntary disclosure to HMRC. Although this does not give you immunity from investigation, HMRC will be more lenient towards you.”