A calm first step · on your device
Liability Estimator
Work out what a year’s rental profit really costs you in tax — with the tricky Section 24 mortgage-interest rules handled for you.
Working out what you owe is the first step to putting things right — and it’s usually more manageable than the worry suggests. This free rental income tax calculator gives an indicative figure for the tax on your rental profit — enter one tax year’s figures to see how much tax you’ll pay. The figures you type into the calculator stay in your browser — not sent to us or saved. (The optional enquiry form is separate: if you send it, your details reach us under our Privacy Policy.) It pairs with the Disclosure Workbench, which can hand its year totals straight to this tool.
Enter one tax year’s figures and see the income tax on your rental profit, with the Section 24 finance-cost restriction applied correctly for that year. In the full journey this loads straight from your Workbench record.
Estimate, not advice — an indicative figure to help you plan, not a filed return. Read the full note ↓
See what a year’s rental tax comes to
Tax on rental profit, by income band
The rate you pay on rental profit depends on the income band it falls into. Here it is at a glance (2025–26 rates, rest of UK):
| Your total income falls in… | Rate on rental profit (now) | From April 2027 |
|---|---|---|
| Basic rate (up to £50,270) | 20% | 22% |
| Higher rate (£50,271–£125,140) | 40% | 42% |
| Additional rate (over £125,140) | 45% | 47% |
Rental profit is added on top of your other income, so it can straddle two bands. Residential mortgage interest is not deducted from profit — you get a 20% credit instead (rising to 22% from April 2027) under Section 24. Rates shown are for England, Wales & Northern Ireland; Scotland sets its own. Sources: HMRC; Finance Act 2015 (Section 24); Finance Act 2026 (April 2027 rates). Correct as at September 2026 — tax rules can change.
What to do with this number
Seeing the figure is the hard part — here’s how it fits into putting things right. This is the tax on one year’s rental profit. For a full disclosure you’ll usually need several years, and then the penalty on top.
- Rebuild every year. The Disclosure Workbench works out each year’s profit and tax and hands the totals straight here — no re-typing.
- See the likely penalty. Feed the total tax into the LPC Penalty Calculator to see what coming forward now could save.
- Talk it through. When you’re ready, a calm, no-obligation conversation is a good next move. You do the groundwork; bring in help only where it earns its fee.
A worked example
Illustrative only — to show how the figures fit together.
Priya has a salary of £55,000 and one rental flat. After letting-agent fees, insurance and repairs, her rental profit is £8,000 for the year, and she paid £3,000 of residential mortgage interest. She wants to know what the rental adds to her tax bill for 2024–25.
Because her salary already takes her into the higher-rate band, the whole £8,000 profit is taxed at the higher rate (40%) — £3,200. The £3,000 of mortgage interest doesn’t reduce the profit directly (that’s the Section 24 rule); instead she gets a 20% tax credit on it — about £600 off. So the rental adds roughly £2,600 to her tax for the year.
The lesson: because of Section 24, a higher-rate landlord with a mortgage pays more than the old “profit × your rate” sum would suggest — which is exactly why this tool applies the restriction for you, year by year.
Common questions
How is tax on rental income worked out?
Your rental profit is added on top of your other income (salary, pension) and taxed at your marginal rate. So the same profit costs a basic-rate taxpayer 20% and a higher-rate taxpayer 40%. Residential mortgage interest doesn’t reduce the profit — instead you get a 20% tax-reducer credit under the Section 24 rules.
What is the Section 24 restriction?
Since 2020–21, landlords can no longer deduct residential mortgage interest from rental profit. Instead, the interest is added back and you receive a basic-rate (20%) tax credit. For higher-rate landlords this means a bigger tax bill than before — which this tool accounts for automatically.
Can a rental loss reduce the tax on my salary?
No — property losses can only be set against future rental profits, not against your salary or other income. A loss is carried forward and used up against the next year’s rental profit. That’s why entering a loss brought forward here only reduces this year’s rental tax to nil, never below.
What is the £1,000 property allowance?
If your total rental income is small, you can deduct a flat £1,000 “property allowance” instead of your actual expenses — whichever gives the lower tax. For a modest let this can reduce the taxable profit (and the tax) to nil. If your expenses are more than £1,000, claim the actual expenses instead. Enter your profit here after whichever gives the better result.
Does this include National Insurance?
No — rental income is not usually subject to National Insurance. Ordinary property letting is treated as investment income, not self-employment, so this tool shows income tax only. (Furnished holiday lettings and property trades can differ.) We help landlords in Hounslow, west London and across the UK.
Is this a rental income tax calculator?
Yes — it’s a free rental income tax calculator for UK landlords. Enter your rental profit, any residential mortgage interest, and your other income, and it estimates how much tax you’ll pay on your rental profit for the year — with the Section 24 restriction applied. It’s built for ordinary landlords, not accountants.
How much tax will I pay on rental income?
Your rental profit is added to your other income and taxed at your marginal rate — 20%, 40% or 45%. So the tax on rental profit depends on what else you earn: a basic-rate taxpayer pays 20%, a higher-rate taxpayer 40%. Enter your figures above for a personalised estimate of the tax on your rental profit.
Are landlord tax rates changing in April 2027?
Yes — from 6 April 2027, rental profit will be taxed at separate, higher rates: 22% basic, 42% higher, and 47% additional (a 2-percentage-point rise at every band). This was announced at the Autumn Budget 2025 and enacted in the Finance Act 2026. From the same date, the Section 24 finance-cost credit rises to 22%, and the personal allowance must be set against employment, pension or trading income before property income. This calculator currently uses the rates up to 2026–27; the 2027 rates will be added once the figures are professionally confirmed. Scotland sets its own rates and may differ. (Correct as at September 2026, based on the Finance Act 2026; tax rules can change.)
Does this work as a Section 24 calculator?
Yes — it applies the Section 24 mortgage-interest restriction automatically. Residential finance costs aren’t deducted from profit; instead you get a 20% tax-reducer credit, capped at the lower of your finance costs or your property profit. This Section 24 calculator handles that for you, year by year.
Ready to talk it through? Send us the details
This is fixable — and you can do a lot of it yourself. For a straightforward case, the free tools take you through it step by step, no accountant needed. For the genuinely complex ones, a professional earns their keep — and we’re here if you want one, or if you’d simply rather not do it alone. The choice is yours.
There’s no charge to make contact and no obligation. Hands-on help starts from a fixed £450 case review, and the full price is always agreed with you before any work begins.