Rental income tax calculator

This works out the Income Tax on a year's rental profit the way the return does it since the finance-cost restriction. Rent received less allowable expenses is the taxable profit; the tax is that profit at the rate for your band; then the relief on mortgage interest and other finance costs comes off as a reduction at the basic rate, 20% (GOV.UK), rather than as a deduction from the profit. The last figure is what is left after interest and tax. Free, on the page, no account; the paid plan keeps the year's figures against the property.

Finance costs are relieved, not deducted, and that is the whole point

Since 6 April 2020 a residential landlord cannot deduct mortgage interest from rental income; instead the tax bill is reduced by the basic rate of that interest, 20% (GOV.UK, changes to tax relief for residential landlords). For a basic-rate taxpayer the two come to the same thing; for a higher-rate taxpayer they do not, and the tool shows the difference as the gap between the tax before relief and the tax due.

The band is yours to choose, because the tool cannot see your other income

Rental profit is taxed on top of your other income, so the rate that applies is the rate at the top of your total, not the rate the rental profit would attract alone. The tool asks for your marginal band (basic, higher or additional, at the rates GOV.UK publishes) rather than guessing it from the rental figures. If the profit straddles a threshold, the true figure sits between two runs of the tool.

What the tool leaves out, so you know what to add

It ignores your Personal Allowance, the Scottish rates, the cap on the finance-cost reduction where profits or total income are small, the property allowance, losses brought forward and every other circumstance of a real return. It is the arithmetic of the restriction, on the page, with the source named; the return is yours and your adviser's.