National insurance on rental income tax on working people: Housing body

Img

Adding national insurance on rental income would be a “tax on working people,” says a housing committee chaired by former Liberal Democrat leader Sir Vince Cable.    

His comments come after the first meeting of the Independent Housing Policy and Delivery Oversight Committee, which the former party and business secretary leader chairs. 

The committee, established in June and supported by Family Building Society, will monitor the government’s performance on meeting its pledge to build 1.5 million new homes by the end of this parliament. 

Cable’s comments follow a range of property tax rises that were leaked to the press in the summer, which Chancellor Rachel Reeves is understood to be considering to help plug a £20bn to £30bn black hole in the public finances when she lays out Labour’s Budget on 26 November.   

One of which is a proposal to apply national insurance on landlord rental income, in a move the Treasury hopes will raise £2bn. 

But Cable argues that “putting national insurance tax on landlords would be most likely to lead to higher rents for tenants.  

“That is, in effect, an increase in taxation on working people.” 

The Treasury has also briefed on other, so far lightly drawn, property tax reforms it is studying. 

These cover a new property tax on the sale of homes worth more than £500,000 and plans for a new local annual property levy to replace council tax over an unspecified phased period.  

Cable argues the case for wholesale reform of the whole property tax system is “unarguable,” but should be put out to consultation, rather than being sprung on the public next month. 

The former politician says: “There is no doubt that the housing market is not working efficiently, and property taxation is a significant factor.  

“The case for major reform of the whole property tax system – from stamp duty to inheritance tax to council tax and VAT – is almost unarguable.” 

Cable adds: “Recent speculation about piecemeal changes in the Budget for revenue-raising purposes, if they came about, would be a step in the wrong direction.” 

“Change on the scale necessary demands the most careful consideration and at the least, a White Paper and extensive consultation to avoid unintended consequences to this fundamental aspect of society.” 

Cable was party leader from 2017 to 2019 and business secretary in the Lib Dem and Conservative coalition government between 2010 and 2015.


More From Life Style