How Much Tax Do You Pay on Rental Income in the UK?

  If you let out a property, one of the first questions you will ask is how much tax do you pay on rental income in the UK. The short answer is that rental profits are taxed at your normal Income Tax rates — but there are allowances, deductions and recent rule changes that make a real difference to your final bill. Here is what every landlord needs to know for the 2026/27 tax year. You Are Taxed on Profit, Not Total Rent HMRC does not tax the full rent you collect. Instead, you pay tax on your rental profit — the rent you receive minus your allowable expenses. That profit is then added on top of your other income, such as a salary, and taxed at your marginal rate: 20% for basic-rate taxpayers, 40% for higher-rate and 45% for additional-rate taxpayers in England, Wales and Northern Ireland. Scotland sets its own income tax bands. Every individual also has a £12,570 personal allowance, plus a separate £1,000 property allowance. If your gross rental income for the year is £1,000 or le...