Buy to let tax calculator

Our buy-to-let tax calculator is provided by UK tax specialists Vantage Accounting. Complete the fields to calculate the amount of tax due on your rental income only (not your overall tax position).

Important: This calculator is for information only. No responsibility is taken for its use. Scottish landlords should note that the tax position in Scotland differs from England and may render inaccurate results.

For accurate and personalised landlord tax advice, or questions regarding the calculator, contact Vantage Accounting via their website.

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Monthly rent

Insert the total amount of gross income you receive, from all of your rental properties, each month . Click "Apply to all" if your rental income is the same every month. You can edit individual months by selecting from the drop down or clicking the left or right arrow buttons.

£ Annual total: £0.00

Monthly expenses

Minimising your tax liability

In order to make sure the tax liability on your rental profit is a small as possible, keeping a record of what expenses your rental property has incurred is vital.

There are different rules for what can and can not be claimed for residential properties and we have given a few examples below.

Residential properties

Allowable expenses are things you need to spend money on throughout the day-to-day running of the property, such as:

  • Rents, Rates & Insurance
  • Repairs and Maintenance
  • Loan Interest (abated from 2017-18 reducing to 0% from 2020-21)
  • Legal, Management and Professional fees
  • Cost of Services provided

If you have rented out properties in the past, you may have claimed a 10% wear and tear allowance on your furnished rental property. This has been replaced by a provision for the deduction of expenditure on the replacement of domestic items. Please note however that you will not get relief on the initial cost of furniture or other capital items.

You have to be careful when recording your expenses as some may be of a capital nature, for example initial costs of purchasing the property or building an extension/loft conversion. These types of expenditure are not expense that can be set against your rental income rather the expenses will help reduce any gain if/when you come to sell your rental property.

Furnished holiday lets

If you plan to rent or are renting a furnished holiday let, assuming you meet the qualifying conditions, these rentals are treated as a trade for tax purposes. Furnished holiday lets have certain advantages over other ordinary buy-to-let properties such as 100% of loan interest still being an allowable expense.

Insert the total expense amount that you pay across all of your properties, each month . Click "Apply to all" if your total expenses are the same every month. You can edit individual months by selecting a month from the dropdown or navigate to a specific month by clicking the left or right arrow buttons.

Arrow or use drop down to change month. Input figures individually or apply to all.

You can claim:
  • business rates, water rates and Council Tax
  • property and contents insurance
  • insurance paid against loss of rents – however, if you claim under your own insurance policy, put any money you received in box 20
  • ground rents
£ Total: £0.00
Expenses you paid out to maintain your property, for example:
  • exterior and interior painting, damp treatment, stone cleaning or roof repairs
  • furniture repairs
  • repairs to any kind of machinery supplied with the property
£ Total: £0.00
For the 2018 to 2019 tax year, you can only claim 50% of the cost of getting a loan, or alternative finance to buy a residential property that you let, and 50% of any interest on such a loan or alternative finance payments.
£ Total: £0.00
You can claim:
  • management fees paid to an agent for rent collection, advertising and administration
  • legal and professional fees for renewing a lease (if the lease is for less than 50 years)
  • professional fees paid to evict an unsatisfactory tenant in order to re-let the property
  • the costs of appealing against a compulsory purchase order
Youcan'tclaim:
  • any costs for the first letting or subletting of a property for more than a year
  • the costs for agreeing and paying a premium on renewal of a lease
  • any fee paid for planning permission or registration of title on property purchase
£ Total: £0.00
This includes any services that you provide to your tenants such as, communal hot water, gardening or cleaning.
If you receive any income for the services that you provide, include this as property income.
£ Total: £0.00
Other allowable expenses include:
  • stationery, phone and miscellaneous costs
  • part of a premium paid to a landlord for the lease (if you’re subletting)
£ Total: £0.00
£ Total: £0.00
£ Total: £0.00

Annual Income

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Working out the tax on your buy-to-let income

The buy-to-let tax calculator will give you a good indication of the amount of tax you may need to pay on your rental income.

Checking your tax commitment is a sensible step and especially relevant post the Section 24 judicial review update.

You will need tax figures in order to work out potential profits from your buy to let.

You can check to see alternative buy to let mortgage options which may mean lower monthly repayments, which could help to reduce tax due on a buy to let property.

Are you up to date on buy to let and landlord taxation?

George Osborne made a massive changes to buy-to-let mortgage interest tax relief which will reduce the allowance to 20% by 2020.

Previously buy to let mortgage have enjoyed a higher level of tax relief than a standard residential mortgage. A phased reduction in the tax relief on buy to let mortgage interest started in 2017.

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Landlord tax after buy to let interest relief withdrawal

Starting in the 2017–18 tax year, HMRC will incrementally restrict tax relief for buy-to-let mortgage interest.

The amount on which you can claim relief will be reduced as follows:

  • 75% in 2017–18
  • 50% in 2018–19
  • 25% in 2019–20
  • 0% in 2020–21 onwards

In its place, individuals will be able to claim a tax reduction, which will be calculated as 20% of the lower of:

  • Finance costs not offset against income in the tax year
  • Total taxable profits of the property business in the tax year*
  • Total income (excluding that from dividends and savings) that exceeds the personal allowance and blind person's allowance (if applicable) in the tax year

Source: www.gov.uk

* If this is the figure used, any excess mortgage interest may be carried forward to the following year

Use the 'tax year' field to get a general indication of the tax impact of the changes to buy to let mortgage interest relief in a given tax year.