"The Government is playing semantics here to simply justify another stealth tax"

As an aside to the potential NI levy on rental income that the Government is apparently considering, we're keen to drill down into whether rental income may justifiably constitute ‘unearned revenue’. After all, someone - the landlord - still needs to work to get paid rent in the first place, e.g. finding property, doing it up, managing it when the boiler throws a seven. Of course, that is not the same way of earning as turning up at a 9-5 or working night shifts in a factory or warehouse. Is Labour essentially saying that landlords are not ‘working people’? In short, is this a semantic fudge? Put your thinking caps on.

Patricia McGirr, Founder at Burnley-based Repossession Rescue Network commented: “This perpetuates the myth that landlords don’t work. Nothing could be further from the truth. The level and scale of rental reform has left many landlords with the thinnest profit margins from which they pay themselves and of course income tax. The Government is playing semantics here to simply justify another stealth tax.”

Jonathan Moser, CEO at Mo'Living commented: "From speaking to my clients, many are frustrated by the notion that rental income is “unearned". Most have invested time, money and risk into acquiring and maintaining properties, often dealing with repairs, regulations and difficult tenants. It’s far from passive. The suggestion that they are not “working people” is insulting, and policies based on that view risk discouraging investment in quality housing. I even received an HMRC letter this morning about rental income despite never renting a property myself, showing how confused the system is."

Stephen Perkins, Managing Director at Norwich-based Yellow Brick Mortgages commented: “Landlords, in the main, have worked hard, paid taxes and saved hard to purchase their investment properties. It then takes time, effort and money to manage them, while being taxed and legislated from all sides. I think it is disingenuous to label all rental income as unearned. For those landlords who remain, even making a profit at all is a hard-slog. Landlords are also key to rental housing supply, so attacks on them always push up rents. The rental market is not the hands off income of investment in shares.”

Samuel Mather-Holgate, Independent Financial Adviser at Swindon-based Mather and Murray Financial commented: "Labour need Peter Mandelson back, the Prince of Darkness, to sell any tax changes to the general public. Who isn't ’working people’? Surely we all are. This was a ridiculous manifesto commitment, and one that has strangled off growth in the UK because you have tax politicians tinkering around the edges whilst Rome burns. Admit your mistake and do something about it."

Kundan Bhaduri, Entrepreneur and Landlord at London-based The Kushman Group commented: “What an unholy concoction of bile duct this Labour government is throwing at housing providers and savers. Now they come for those who provide the roof over the heads of millions of people in this country, paid for by private capital at private risk and created with personal endeavours. Private landlords are providing what successive governments have failed to do, a guarantee of a place to live for most. A lot of landlords entered the market thinking they would get a fair deal. But alas, the time is now to fold up and move on to pastures anew for most small landlords. Reeves is actively colluding with large house builders and institutional landlords to the direct detriment of small landlords who bought an extra property to serve their pension. Not only is the government targeting their pension pots but it is also now coming at those who had the diligence and discipline of saving up and creating an income stream for their retirement. Shame on the government.”

Michelle Lawson, Director at Fareham-based Lawson Financial commented: "This isn’t about the labelling, it is about the cause and effect. We are in a supposed housing crisis and the Government are making it worse. This is all about a level playing field. Landlords don’t have a problem in paying their fair share but in recent times, they have now incurred additional Stamp Duty when buying a property at the outset. They then, following Section24, pay tax on revenue, namely rental income , not profit after finance, and now are expected to possibly pay NI. Something needs to therefore balance. Are they treated as a business? Landlords are crucial to housing supply and, without them, as we are seeing, rents are pushed up and the councils are desperate. If the balance was to remove section 24 and add NI, landlords would be more accepting."

Rob Mansfield, Independent Financial Advisor at Rootes Wealth Management commented:

"This is part of the wider TikTok obsession with passive income. It's the notion that there are hacks that enable you to have a regular income without needing to do anything. In reality, it's a huge con and everything requires some form of work, either to set it up or maintain it. As any tenant will tell you, a good landlord will work really hard. Maybe we should find ways of double taxing the bad ones to encourage better behaviour?"

Tony Redondo, Founder at Newquay-based Cosmos Currency Exchange commented: "To paraphrase George Orwell, "All income is equal, but some income is more equal than others"."