Rumoured Autumn Budget move to extend national insurance on rental income will hurt tenants

The other consideration here is that it skews the market even more.

If you own your property in a limited company, presumably you wouldn’t have to pay the proposed national insurance.

If you don’t own your property in a limited company then if your income is over £50k gross (not net) then you are already saddled with extra tax at 40% or above with no way to recover that other than to increase the rent to tenants. If somebody hits you with national insurance (which isn’t insurance but just extra tax) on top of that, then again, you have no way to recover the extra tax other than to increase the rent to tenants.

The effect of applying NI to landlords’ income would not be as great if you were able to offset your finance costs against income, as any other business can. Pursuing any other policy will only decrease competition in the housing market and raise rents for tenants.

It is all speculation. Is she going to limit the tax free lump sum you can take from a pension, is she going to limit the ISA allowance, is she going to charge landlords national insurance, Is she going to increase stamp duty and capital gains tax, is she going to continue to freeze tax thresholds, will she dump the pensioner triple lock? The answer is we don’t know. Speculation is rife and appears to be promoted by the Government in the form of deliberate leaks. Is there a method to this madness? Are we being softened up for a punishment Budget or will it be a relief to everyone when none of this actually comes to pass or is really watered down?

Reply to the comment left by northern landlord at 06/10/2025 – 15:38
You are right that it is all speculation and the problem is that the speculation is doing damage. Rachel Reeves has caused a landslide in people drawing down 25% of their pension whilst they can and it is highly unlikely that this money would be invested in her favoured capital projects that she and her cronies want to force pensions to invest in.

Both the Renters Rights Bill and the speculation over NI on rental income will also be pushing landlords to push up rents now while they can just in case they don’t do it later.

Although this government came to power claiming that it would grow the economy, this government said one thing but did the opposite: It is not an ‘investment friendly’ or ‘business-friendly’ government. It’s not a government that is competent enough to grow the economy. And because this government has shown its true colours the speculation will now do more damage to the economy.

Reply to the comment left by northern landlord at 06/10/2025 – 15:38
starting to think this may be the case. The idea its going to be horrific then we all apparently have a huge sigh of ‘relief’ when Rachel from accounts spills the beans? Catastrophe with a small c?

On the other side is all the kite flying just to test the water? They know they are going to shaft someone, but are they simply looking now to avoid shafting their base vote, on which they are more dependant on than ever?

Mind you the way it is already I have a feeling the majority of the (then) Labour voters themselves are feeling pretty peeved about what is going on. If they are all shifting to Reform anyway does it matter what Labour do now anyway? Boat sunk?

Personally I think they have no choice than to go with the ‘option’ of increasing income tax across the board…????

Reply to the comment left by northern landlord at 06/10/2025 – 15:38tinker tinker tinker….

The fudget formalises one thing – that everything is in a right bl@@dy mess and there is no actual solution.

As long as they don’t listen to the Green Party who have made their objectives Cristal clear. Get rid of the PRS through increased taxes and then (somehow) build a load of social housing (we have heard that before). No government seems to understand the fundamentals of economics. Build the millions of social homes and demand will drop, and prices to buy or rent will fall. The impossible trick is paying for the social homes..

Absolutely it’s all speculation. Some of it seems to have originated from Torsten Bell (who is probably running the country because the other morons arent).

The trouble is Rachel & 2TK kept saying how bad govt finances were from day 1 so people start believing it or adjusting their behaviour. Eventually she twigged she was talking down the economy and people were believing it so she tried to talk it back up but has reverted back to her negative ways.

Speculation is rife so unsurprisingly people are taking preventative action eg accelerated draw downs on pensions, increases in taking 25% tax free from pension, selling property, leaving the country etc.

All this negative talk has consequences.
Comparing where the economy is now to when they took office:

Inflation was 2% now it struggles to be less than 4%

The pound was at a 2 year high against the Euro. Now the pound is worth little more than a Euro and is at the lowest levels it’s ever been.

Unemployment was falling – now unemployment is rising due to Rachel’s jobs tax.

Government spending was out of control – Rachel has simply put her foot on the accelerator. Debt has grown from £2.53 trillion to £2.71 trillion.

Growth was pretty stagnant at about 1.6%. The OBR is predicting around 1% growth this year.

The cost of servicing government debt has spiralled due to a mix of inflation, interest rates & increased govt spending. 4% of GDP (11% of taxes) is spent just servicing government debt. By the end of Labour’s term in office it looks set to double so harsh cuts will be needed just to service the debt as it will be impossible to “balance” the budget (not that it’s been balanced for the last 20 years hence the debt mountain).

Come back Liz Truss – you were doing a better job than these clowns.

Anyway back to the article – I think National Insurance, if introduced, will backfire massively – it opens up lots of loopholes. I wrote this blog post on it.https://think-we-are-stupid.blogspot.com/2025/08/rachel-planning-to-charge-national.html

The root problem is UK tax law is the largest in the world (and Rachel will doubtless make it bigger). It’s thought to be 21,000 pages compared to Hong Kong at 276 pages.

Cant see NI going on rents for 3 reasons

1) it would simply be added on to rents
2) NI is not paid by LTD companies, couldnt really add NI to rents paid to LTD companies as this would affect the ‘big boys’ as well
3) Even if NI was added to ‘privately owned’ properties, many of these would be partnerships or owned by pensioners like mine, and as I am over pension age I dont pay NI – or would this have to change as well – god knows how you would report it.

Reply to the comment left by GlanACC at 07/10/2025 – 10:45
Adding NI to rental income would have less of a negative effect if you were able to offset your finance costs against rents, as any other business can. It will still raise rents, just not as much.

Reply to the comment left by Beaver at 07/10/2025 – 11:39
The one positive of individuals’ rental profit being treated as NI income is that it would be hard for them to say it is not earned income, bringing an end to the anomaly of us not being able to claim tax relief on pension contributions.