1. What is Net Rental Income?

Net rental income is the amount left after subtracting allowable expenses from your gross rental income. This is the taxable amount for UK landlords and property investors.

2. How the Calculation Works

The calculator uses this simple formula:

Where:

• Gross Rental Income — Total rental income before any deductions
• Allowable Expenses — Costs you can deduct from your rental income

3. Allowable Expenses in the UK

Common Allowable Expenses: Letting agent fees, property maintenance and repairs, utility bills, council tax, insurance, and mortgage interest (with restrictions).

Non-Allowable Expenses: Capital improvements, personal use portions, and certain legal fees.

4. Using the Calculator

Instructions: Enter your total annual rental income and total allowable expenses in GBP. The calculator will show your net rental income for tax purposes.

5. Frequently Asked Questions (FAQ)

Q1: What counts as rental income in the UK?
A: All payments from tenants including rent, service charges, and any other payments for use of the property.

Q2: Can I deduct mortgage payments?
A: Only the interest portion of mortgage payments is deductible, and this is being phased under current tax rules.

Q3: Are furnishings deductible?
A: Replacement of furnishings is usually allowable, but initial purchases may be considered capital expenses.

Q4: How does this differ for companies vs individuals?
A: Companies have different tax treatment of finance costs and may claim different types of expenses.

Q5: When should I calculate my rental income?
A: Calculate annually to complete your Self Assessment tax return (due January 31 following the tax year).