BTL Tax Calculator UK
Calculate rental income tax and compare personal vs limited company
Frequently Asked Questions
How is rental income taxed in the UK?
Rental income is taxed at your marginal income tax rate (20%, 40%, or 45%) after deducting allowable expenses. Since 2017, Section 24 limits mortgage interest deductions to a 20% tax credit.
What is Section 24?
Section 24 (also called the "tax relief withdrawal") limits landlords to 20% tax credit on mortgage interest rather than deducting the full interest from rental income. This affects higher-rate taxpayers most significantly.
Should I use a limited company for BTL?
Ltd companies pay 25% Corporation Tax on profits and extract money as dividends. This can be more tax-efficient for higher-rate taxpayers, but consider higher setup costs, stamp duty on additional properties, and less flexibility accessing profits.
What expenses can landlords claim?
Allowable expenses include: letting agent fees, legal fees, insurance, maintenance and repairs, utility bills (if paid by landlord), accountancy fees, and capital allowances on fixtures and fittings.
When does MTD start for landlords?
Making Tax Digital (MTD) for landlords started in April 2024 for those with rental income over £50,000, extending to £30,000 from April 2025. Landlords must keep digital records and submit quarterly reports.
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