Landlords should pay National Insurance on rental income like other workers – a move that could raise £3.2billion, says the New Economics Foundation (NEF), a think tank with close links to Labour.

George Bangham (main picture), Head of Social Policy at the foundation, says: “When landlords make money from rental income, they are not asked to contribute the same as everyone else.

“This is clearly unfair, income from renting out a property should be treated the same as income from work.”

Unwarranted exemptions

In its report, the NEF has urged the Government to close “unwarranted tax exemptions given to landlords by extending the National Insurance base to include income from rental properties.”

This, it added, should go alongside a mortgage interest deduction, to ensure landlords paid tax only on profits rather than partly on revenues.

However, Chris Norris, Chief Policy Officer at the National Residential Landlords Association, told the Telegraph: “Adding NICs to the panoply of taxes and financial burdens private landlords already have to contend with would be disastrous for their balance sheets.

“Landlords, facing already squeezed margins and a raft of reasons not to invest, would have little choice but to pass on the cost of yet another tax hike in the form of higher rents.”

The reality is that landlords have already been taxed very heavily, and these types of policies have unintended consequences.”

Paul Shamplina, Founder of Landlord Action, said: “The reality is that landlords have already been taxed very heavily, and these types of policies have unintended consequences.

“Taxing landlords NIC, alongside everything else, means rents go up for tenants.

“This proposal, in addition to what some feel is an anti-landlord feeling, could be a step too far, and even more landlords may feel they need to leave the sector.”