You only pay tax on your rental profit — rent minus allowable expenses. Mortgage interest is the catch: since the Section 24 rules it is not deducted from profit, but instead gives a basic-rate tax reduction worth 20% of it.
For higher-rate landlords that 20% relief is less generous than a full deduction, so the real bill is higher than a simple rent-minus-everything sum suggests. Plot applies the Section 24 credit for you and shows the difference.
From April 2026 landlords over the income threshold must keep digital records and file quarterly under Making Tax Digital.
Not from profit. Under the Section 24 rules, finance costs give a 20% reduction in your tax bill instead of being subtracted from rental income.
A flat allowance you can claim instead of actual expenses. The first £1,000 of property income is tax-free, so it's best when your real costs are under £1,000.
Generally no. Rental profit is not subject to Class 4 National Insurance the way self-employment profit is.
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