Rachel Reeves is considering applying national insurance contributions to rental income as a means to raise roughly 2 billion for the Treasury. The proposal would subject earnings from property to the same NI levy that affects other forms of income, targeting what is described as unearned income. Currently, most property, pension, and savings income are exempt from NI, while other incomes face an 8 per cent charge. The measure is presented as a way to generate additional funds amid mounting fiscal pressures and rising borrowing costs without increasing VAT, income tax, or NI across the board.
Rachel Reeves is reportedly plotting a tax raid on landlords in an attempt to plug the up to 40billion blackhole in the nation's finances. The chancellor is considering raising taxes for landlords in her next budget by applying national insurance (NI) to rental income, arguing the move would target unearned income, according to reports. The plans aim to make the Treasury 2 billion, as it attempts to avoid breaking the chancellor's red lines outlined before the general election, which included not increasing VAT, income tax or national insurance.
Currently, NI contributions do not have to be paid on most earnings from property, pensions and savings, while employees with other forms of income are hit with the 8 per cent levy. But sources have told The Times that NI contributions could now be levied on rental income in what would be a significant potential extra source of funds at a time when Ms Reeves is under a multitude of financial pressures, including rising borrowing costs.
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