Reeves ‘eyes tax hike for landlords’ with ‘rental national insurance’
The Treasury is reportedly considering a tax increase on landlords by imposing national insurance on rental income ahead of Rachel Reeves’ autumn budget.
Officials are said to be looking at proposals to hike a levy on property earnings in the hope of raising £2 billion as the Chancellor searches for ways to raise cash amid dire warnings about the state of the public finances.
The move is being backed by some Labour MPs and Government aides, with some proponents saying that landlords were seen as a way of targeting “unearned revenue”, The Times reported.
Employee national insurance contributions (NICs) on other earnings stand at 8%, but drop to 2% above a £50,270 threshold.
“Red lines”
Allies of Ms Reeves are said to have argued the proposals avoid breaking the Labour pledge not to raise VAT, income tax or NICs because they mark an expansion of the income to which this levy is applied, rather than an increase in its rate, and could generate around £2 billion.
Officials are seeking to explore ways to raise revenue without crossing these three “red lines,” which limit Ms Reeves’ options when it comes to balancing the books.
The scale of the challenge facing her in the autumn budget was illustrated by the NIESR economic think tank warning this month that Ms Reeves is set for a £41 billion shortfall on her self-imposed rule of balancing day-to-day spending with tax receipts in 2029-30.
Economy
A Treasury spokesperson said the best way to strengthen the public finances was by growing the economy, adding: “Changes to tax and spend policy are not the only ways of doing this, as seen with our planning reforms, which are expected to grow the economy by £6.8 billion and cut borrowing by £3.4 billion.
“We are committed to keeping taxes for working people as low as possible, which is why at last autumn’s budget, we protected working people’s payslips and kept our promise not to raise the basic, higher or additional rates of income tax, employee national insurance, or VAT.”
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Dublin registered Amazon / google / microsoft have tax breaks and Rachel Reeves has singled sourced them billions of pounds of government contracts since she became chancellor. The UK governments Artificial Intelligence strategy excluded all UK suppliers and included USA based suppliers only. So the UK government is giving these suppliers access to UK government officials and UK Intellectual Property for them to make super-normal profits. The current government could be working with BT / ITV etc on technology projects and creating jobs in Wales / Scotland etc; plus excluding all suppliers based in regions such as Dublin which have… Read more »
This doesn’t make sense because a landlord is neither an employer or an employee, and chasing more out of the sector will mean fewer rental properties and higher rents.
The NI gap to close is the discount enjoyed by employees on salaries over £50k. But since that includes politicians and Treasury mandarins, perhaps we shouldn’t expect that any time soon.
I have to agree with you; from history, the rents will go up to cover the tax payments
She should try hitting the likes of herself just for a change. The national debt would be cleared in a week.
If landlords are being charged more then they’ll simply raise rents?
Exactly. It is always the little man that has to pay in the end. Business people immediately pass on any increases to the customer, with a little more added on for themselves, but always make a big song and dance about how it badly affects them and their businesses. We all ask: “Why don’t they tax wealth?” Even taxing the well-off would only lead them to increase the prices of whatever business they run and pass it in to us. The buck always stops with the working man.
You’re assuming all wealth comes from business activities that we need or want, which is exactly what the super wealthy want government to think about their inherited millions.