More Londoners declared underpaid tax to HMRC last year than all other top ten biggest UK cities combined 

London dominates the UK for the number of individuals coming forward to HMRC to admit that they have underpaid tax, says accountants and business advisers, Lubbock Fine. 3,296 individuals living in London admitted to HMRC that they had evaded tax in the last year* – more than the rest of the nine biggest UK cities combined.

In the other nine largest UK cities, disclosure numbers were significantly lower including Manchester (241 people admitting they had underpaid tax), Birmingham (394) and Leeds (150). The lower number of voluntary disclosures in other UK cities highlights the concentration of cases in the capital and its most affluent postcodes (see table below).

Graham Caddock, Tax Director at Lubbock Fine says that anyone who has underpaid tax deliberately or accidently should come forward to the HMRC as soon as possible.

Disclosing mistakes to HMRC as early as possible is the best way to avoid or reduce hefty fines.

Graham Caddock says: “HMRC’s sophisticated approach to detecting tax errors using systems such as their Connect database, is targeting tax evasion more effectively than ever before.”

“Taxpayers who have purposely or accidently avoided their tax obligations are starting to realise it is more likely than ever that they will be caught. For anyone who has accidently or deliberately underpaid their taxes, it is more important than ever to disclose and admit tax errors early rather than wait for them to be discovered.”

Some of the common reasons why people underreport their tax obligations include:

• Undeclared rental income, such as letting out a property or room through platforms like Airbnb
• Income from side businesses, cryptocurrency trading, or offshore accounts, which can be difficult to track and report accurately
• Other self-employed income streams including freelance work, social media influencing, and brand collaborations, which may also go unreported

Graham Caddock says: “With income from side businesses, property or offshore investments becoming more common and visible to HMRC, the risk of discovery is highly likely. Voluntary disclosures to the HMRC are the best way to correct these errors before they become bigger problems leading to hefty tax penalties. In many cases HMRC can go back up to 20 years to collect unpaid taxes”

Differences within London are also notable. South West London dominates the table of the top 10 postcodes areas for the number of people approaching HMRC to confess the underpayment of tax, with the number of people coming forward to the HMRC reaching 492.

Disclosures to submitted per postcode for the tax year 2024/2025.

*Data obtained from a Freedom of Information request to HMRC – year to 31 March 2025.