Landlords should face tax hike, policy advisers argue
An influential thinktank recommends Chancellor Rachel Reeves cut National Insurance and raise income tax in November's Budget.
Landlords could be hit by a new tax blow if Chancellor Rachel Reeves (main picture) takes up a recommendation from an influential thinktank.
The Resolution Foundation is suggesting that Reeves cut National Insurance and add 2p onto income tax when she unveils her Budget in November.
This move would affect landlords who currently pay income tax but not NI, at a time when many are already considering exiting the property market.
Strong links
The Chancellor should protect workers’ pay packets and level the playing field on how different forms of income are taxed, the Resolution Foundation says.
A 2p cut in employee National Insurance offset by a rise in Income Tax would raise £6 billion in a Budget that will require significant tax increases, according to the Foundation.
Treasury Minister Torsten Bell was CEO at the Resolution Foundation until last year, so there are strong links with the Labour Party.
Level playing field
Adam Corlett, Principal Economist at the Resolution Foundation, says the tax change “should form part of wider efforts to level the playing field on tax, such as ensuring that lawyers and landlords face the same tax rates as their clients and tenants”.
But Housing Minister Matthew Pennycook insisted Labour would stick to its manifesto pledge to not increase income tax, The Independent reports.
He told Times Radio: “We’re going to honour our commitments not to increase the rates of income tax, National Insurance or VAT on the pay packets of working people.”
And he added “the principles that will underpin this Budget are that we’re going to build an economy that works for all working people”.
Landlords to be hit with National Insurance on rental income
One day I live in hope that someone in some party in some government learns basic economics but I am not holding my breath. Tax landlords more and more leave the sector and more people rely on social housing which the government have no money to fund. Meanwhile those tenants left pay more rent to cover the extra tax.
Both Kier Starmer and Rachel Reeves are currently landlords until the next election.
NI on rental income would be the equivalent to the turkeys voting for an early Christmas.
Again the treasury are getting advice about fairness rather than how to raise revenue. Landlords are seeing their taxable income shrinking and if the treasury want more tax revenue from landlords they should concentrate on ensuring landlords are making more profit. Here is a wild idea Housing Associations pay no tax on their profits as they are seen as Charities. As they seem to have forgotten to fulfill their charitable aims other than to subsidise the rents of their often rich tenants. They could put up the rents of well off tenants pay the Treasury a shed load of money and solve problems for everyone!