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What is Income Tax bands?
Last verified 23 October 2026
Income Tax bands are the slices of taxable income that are charged at different rates. Outside Scotland, for 2026 to 2027 with the standard Personal Allowance, income up to £12,570 is tax free, £12,571 to £50,270 is taxed at 20%, £50,271 to £125,140 at 40%, and income over £125,140 at 45%.
Why it matters to landlords
Rental profit is added to your other income, such as wages or pensions, so it is often taxed at your highest band. A landlord earning £45,000 from a job pays 20% only on the first £5,270 of rental profit, and 40% on anything above that. If your adjusted net income goes over £100,000, your Personal Allowance also starts to shrink, which raises the tax on that slice.
Welsh taxpayers pay Welsh rates, which for 2026 to 2027 use the same bands and rates as above. Scottish taxpayers have different bands on non savings, non dividend income, including rent. From 6 April 2027 property income moves to separate property rates, so the band your rent falls in will matter even more.
Example
A landlord in England earns a £45,000 salary and £10,000 rental profit, making £55,000. £5,270 of the rent is taxed at 20% and £4,730 at 40%.
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