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14/7/25 8:13 pm
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Rachel Reeves said she is “looking at further measures on tax and spending” before the 26 November Budget, underscoring expectations of new revenue-raisers as weaker growth and higher borrowing costs tighten the public finances.
Speaking in Washington ahead of IMF meetings, the chancellor framed the choices as necessary to uphold fiscal credibility and her rules to get debt falling. Markets and analysts already expect a package of tax increases next month after costlier gilt financing and a dimmer productivity outlook.
Within that debate, officials have examined whether to apply national insurance (NI) to rental profits - currently outside the NI system and taxed only through income tax - though no design, rate or threshold has been published. Press reporting has pointed to potential revenues in the low billions, but any proposal would sit alongside other options now under Treasury review.
What an NI charge on rents could mean
Landlords with one or two properties - already squeezed by higher mortgage costs and prior finance-cost restrictions would be most exposed at the margin. Actual effects would depend on the final policy, but simple scenarios illustrate the order of magnitude:
• 6% on profits above £12,570 (mirroring the current main Class 4 band) a landlord with £20,000 profit would pay NI on £7,430, or £446
• 8% on the same base £594
These amounts would be in addition to income tax and local compliance costs.
The broader fiscal frame
Reeves is under pressure to rebuild headroom after earlier tax measures and abandoned welfare savings narrowed options. Think-tanks estimate £20-30bn of consolidation could be required to satisfy fiscal rules at the Budget, the Treasury has set 26 November for the statement. The IMF, meanwhile, is urging the UK to maintain robust forecasting and fiscal transparency.
The National Residential Landlords Association said the idea risked backfiring. ‘This would be another financial blow to responsible landlords who are already dealing with a wave of new regulation,’ a spokesperson said. ‘Tenants will ultimately pay the price through higher rents and reduced choice.’
For now, landlords should review the profitability of their portfolios, take professional tax advice on structuring and disposals, stress-test cash flow for higher outgoings, and prepare for digital reporting under Making Tax Digital. With details still to come, the small print will matter and will determine whether the policy raises revenue without worsening the rental crunch.
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