How UK landlord income tax works in 2026/27
UK landlords pay income tax on their rental profit — not on the raw rent they receive. Understanding the difference between rental income and taxable rental profit is the starting point for any landlord tax calculation.
Under Making Tax Digital for Income Tax, which applies to landlords with qualifying income above £50,000 from 6 April 2026 per HMRC guidance, landlords must submit quarterly updates rather than a single annual Self Assessment return. The underlying tax calculation does not change under MTD — but the timing of reporting does.
Section 24 mortgage interest relief: how it works in 2026
Section 24 removed the ability for individual landlords to deduct mortgage interest directly from rental profit. From 2020/21 onwards, mortgage interest gives a flat 20% tax credit — not a deduction from profit. This calculator applies this rule correctly: it calculates tax on the full rental profit, then subtracts the 20% credit.
2026/27 UK income tax rates for landlords
| Band | Taxable income | Rate |
|---|---|---|
| Personal Allowance | Up to £12,570 | 0% |
| Basic rate | £12,571 to £50,270 | 20% |
| Higher rate | £50,271 to £125,140 | 40% |
| Additional rate | Over £125,140 | 45% |
Want your quarterly tax figures calculated automatically?
LandlordTaxAi categorises your bank statement transactions against SA105 boxes and generates your quarterly update figures without a spreadsheet.
For more on what MTD requires, read the full MTD for landlords guide.