The Labour Party under Andy Burnham

[Bletchleyite]

That would result in a much larger black employment market, trying to avoid PAYE. HMRC wouldn't get any smaller - employment there would shift towards catching those working but not doing PAYE. It also encourages people not to work at all. Perhaps it would be better to have all tax on VAT, to encourage everyone to work and earn money to be able to afford to buy things.....

VAT is a very hard tax for individuals to evade, which is what its strength is. The downside of it is that it's hard to do a "higher rate" for higher consumers. It should probably stay and could perhaps go up to 25% but it can't practically replace income tax.

The thing that's a challenge is how we are going to tax productivity by AI, as if the pool of workers decreases you have to get it from somewhere.

 

[Topological]

If the tax was arranged in that way then I would be quite happy! But it is not.

That would result in a much larger black employment market, trying to avoid PAYE. HMRC wouldn't get any smaller - employment there would shift towards catching those working but not doing PAYE. It also encourages people not to work at all. Perhaps it would be better to have all tax on VAT, to encourage everyone to work and earn money to be able to afford to buy things.....

Which work? Most situations would be completely legal and so wouldn't need going after.

A major employer like Amazon would still employ people - PAYE.

Smaller businesses may move to a non-salaried option, but that would make it easier to set up small businesses. In turn that would give a lot of people a route to further income and possibly even reduce some of the market share of the larger companies in the process. Whilst you would be losing tax take, you would be reducing the amount of money that goes to companies with "profit reduction" schemes that pay limited tax anyway. No one is going to work for nothing, so people would either be salaried or move into their own small business.

I think a world with many small entrepreneurs would be a lot better than what we have now from almost every perspective.

== Doublepost prevention - post automatically merged: 26 Nov 2025 ==

VAT is a very hard tax for individuals to evade, which is what its strength is. The downside of it is that it's hard to do a "higher rate" for higher consumers. It should probably stay and could perhaps go up to 25% but it can't practically replace income tax.

The thing that's a challenge is how we are going to tax productivity by AI, as if the pool of workers decreases you have to get it from somewhere.

I suspect you could extend exemptions from VAT to include more foodstuffs and basic clothing.

I am not 100% sure how you present an Armani suit being essential, but probably you can not charge VAT on clothing below £X.

 

[ld0595]

What an unbelievably short sighted decision to impose national insurance on salary sacrifice contributions into pensions over £2k. Millions of people are not saving anywhere near enough to be able to afford to retire and this does nothing at all to help.

We should be encouraging people to save as much as they can for retirement, not discouraging it, and once again those who are being sensible, saving now and planning ahead are stung.

 

[oldman]

What an unbelievably short sighted decision to impose national insurance on salary sacrifice contributions into pensions over £2k. Millions of people are not saving anywhere near enough to be able to afford to retire and this does nothing at all to help.

We should be encouraging people to save as much as they can for retirement, not discouraging it, and once again those who are being sensible, saving now and planning ahead are stung.

As Reeves pointed out this is a loophole available to some but not others, which is particularly used by high earners and is 'forecast to almost treble in cost ... from £2.8bn in 2017 to £8bn by 2030' (budget speech).

Higher earners can still get tax relief on their pension contributions and still put money into ISAs. They'll live.

 

[WelshBluebird]

What an unbelievably short sighted decision to impose national insurance on salary sacrifice contributions into pensions over £2k. Millions of people are not saving anywhere near enough to be able to afford to retire and this does nothing at all to help.

We should be encouraging people to save as much as they can for retirement, not discouraging it, and once again those who are being sensible, saving now and planning ahead are stung.

Don't agree it all and I'm someone on a salary sacrifice scheme.

For a start lots of people aren't on one so already pay NI on their pension contributions. That doesn't stop those people from saving for retirement.

And secondly the amounts are tiny. Even if you salary sacrifice the full amount allowed of £60k, you only will pay an extra £1200 ish in NI I believe. Next to nothing if you are already saving that much. And for more normal amounts of saving, the amounts are much smaller - I'll pay an extra £100 ish a year in NI, which compared to my wage is nothing.

And finally, as hinted at above, such schemes are mostly used by those of us lucky enough to earn a high wage to avoid paying some tax. If someone is earning 160k and using salary sacrifice schemes to get their salary to 100k to avoid the personal allowance tapering, an extra 1.2k on the NI bill is the least they can pay for the luxury of that

 

[JonathanH]

What an unbelievably short sighted decision to impose national insurance on salary sacrifice contributions into pensions over £2k. Millions of people are not saving anywhere near enough to be able to afford to retire and this does nothing at all to help.

£2,000 a year with a member contribution rate of 5% means that someone's pay needs to be £40,000 before this matters. Income tax relief on contributions for higher rate taxpayers is still granted in full.

The hit is actually on the employer, so could see employers cutting back their contributions.

Higher earners can still get tax relief on their pension contributions and still put money into ISAs. They'll live.

Yes

And secondly the amounts are tiny. Even if you salary sacrifice the full amount allowed of £60k, you only will pay an extra £1200 ish in NI I believe. Next to nothing if you are already saving that much. And for more normal amounts of saving, the amounts are much smaller - I'll pay an extra £100 ish a year in NI, which compared to my wage is nothing.

For a member who is only paying 2% NI contributions on their marginal income, yes, but the employer will have to pay 7.5 times as much as the member in that instance, which could add up across the wage bill

 

[Bletchleyite]

For a member who is only paying 2% NI contributions on their marginal income, yes, but the employer will have to pay 7.5 times as much as the member in that instance, which could add up across the wage bill

More likely they'll pass that on in some form, either directly by reducing the amount that goes in or by reducing their match funding.

 

[ainsworth74]

The EV discussion warrants its own thread so can be found in the long running existing thread here.

 

[styles]

As Reeves pointed out this is a loophole available to some but not others, which is particularly used by high earners and is 'forecast to almost treble in cost ... from £2.8bn in 2017 to £8bn by 2030' (budget speech).

This is nonsense. Even basic rate taxpayers benefit from this allowance.

If they wanted to put the burden on higher earners they could drop the annual allowance back down from 60k to 40k, or even lower to be honest, they could've restricted tax relief to 20% or even 40%, they could've set a lifetime allowance.

£2k is a ridiculously low limit to be setting on salary sacrifice contributions. This will merely lead to the middle class saving less into their pensions and the taxpayer topping it up with pension credit.

This literally affects people on minimum wage.

Higher earners can still get tax relief on their pension contributions and still put money into ISAs. They'll live.

Yes they'll live but the economic effects of this policy change will be negative, not positive, for the average taxpayer.

 

[WelshBluebird]

2k is a ridiculously low limit to be setting on salary sacrifice contributions. This will merely lead to the middle class saving less into their pensions and the taxpayer topping it up with pension credit.

Again it isnt a cap, and the absolutely most it would cost someone is £1.2k a year and that would only be those who are saving £60k a year (i.e. those in the top 1% of paye salaries). Most normal people will see a much much smaller impact. Even those of us on pretty high salaries who are able to save a fair bit won't be affected that much - as I said above my NI will go up by about 100 quid a year. Most people will see aomething more like 50 quid a year, or no impact at all.

This literally affects people on minimum wage.

No it doesn't, because you can't use salary sacrifice schemes if you are on minimum wage (as they would reduce your salary to below min wage).

== Doublepost prevention - post automatically merged: 26 Nov 2025 ==

For a member who is only paying 2% NI contributions on their marginal income, yes, but the employer will have to pay 7.5 times as much as the member in that instance, which could add up across the wage bill

More likely they'll pass that on in some form, either directly by reducing the amount that goes in or by reducing their match funding.

To be fair that is a downside, but I can easily see the minimum employee contribution being increased over the next 4 years anyway.

 

[styles]

No it doesn't, because you can't use salary sacrifice schemes if you are on minimum wage (as they would reduce your salary to below min wage).

== Doublepost prevention - post automatically merged: 26 Nov 2025 ==

Yes you can, so long as you don't sacrifice below minimum wage.

Anyone salary sacrificing above £167/month into their pension will be worse off because of this. These are not minted people, they're everyday workers.

 

[WelshBluebird]

Yes you can, so long as you don't sacrifice below minimum wage

If you're already on minimum wage then obviously you cant sacrifice anything becuase you'd then be below it! So as I said, despite what you claimed, it literally doesn't affect those on minimum wage because those people literally cant join the schemes.

Anyone salary sacrificing above £167/month into their pension will be worse off because of this. These are not minted people, they're everyday workers.

And how much extra a year do you think someone putting £167 a month into their pension will pay exactly? I'll give you a hint - its next to nothing.

 

[75A]

As a Landlord my tax on the income is going up from 20 to 22%, so that gives me two options:
Raise the Rent or sell one or more of the properties

 

[Topological]

As a Landlord my tax on the income is going up from 20 to 22%, so that gives me two options:
Raise the Rent or sell one or more of the properties

I wonder if you are doing something wrong?

How much rent are you charging if you have multiple properties and still get a combined income below £50,000?

I do appreciate that you may be retired and not have any other income, but it seems unlikely that a property would rent for much less than £10k per year. By the time I gave up on being a private landlord of 4, the taxable component had passed £36000. My job is in the 25% of jobs that are above the higher rate threshold.

My last tax bill for the properties was nearly £17000.

 

[WesternLancer]

A bit of history on cash ISAs. They started in 1999 as a reform of the previous Tax Exempt Special Savings Accounts (TESSAs).

Until 2007/08 the upper limit was £3k. Two increases then took the limit up to £5.1k in 2010/11 then for a few years the upper limit was raised annually in line with RPI, which took the limit up to £5940. The 2 big increases were to £15k in 2014/15 and 20k in 2017/18. If the RPI link had been retained the limit would now be somewhere just under £10k, depending on the exact spec of the calculation (which was complicated, each annual increase had to be a multiple of £120 so as not to screw up monthly subscriptions).



If the upper limit is reduced to £12k, then it will still be very generous in comparison to years before 2014.

Anyone saving their maximum allowance since 1999 has now been able to invest more than £250k in cash ISAs tax free, more than £200k of which has been since 2014.

The big upper limit since 2014/15 has been a blatant tax break for the rich. In particular it has enabled them to shelter inheritances and the proceeds of capital gains from income tax, by feeding the full £20k allowance into ISAs every year.


And now a bit of economics. An important effect of the high ISA allowance is that it provides cheap finance to banks and building societies. This helps to keep mortgage interest rates down, but that mainly feeds through into higher house prices not economic growth. The higher house prices then benefit the next round of inheritances and so the vicious circle takes another turn.

The full story of the UK's dysfunctional housing market and how it hinders economic growth would take much longer.

Excellent post.

== Doublepost prevention - post automatically merged: 27 Nov 2025 ==

An increase to income tax as levied on the income from rents of a couple of percentage points.

Budget 2025: Landlord income tax rates to rise

Landlords will pay increased rates of income tax under plans announced by Chancellor Rachel Reeves today. Rates of income tax from property income will increase by two percentage points from April 2027, a move which the Office for Budget Responsibility (OBR) has recognised will hit landlords in...

www.nrla.org.uk

I don't totally understand the rationale behind this - her speech said "we want to move towards taxing all income the same" (paraphrased) then she introduced a change that, er, makes rental income taxed at 2p/£ higher than other income. It might have been as a proxy to applying national insurance to rental incomes as that is 2% above a certain cap?

Not a tax on rental income. It’s on rental profit. Very different thing.

But rent is not set like that, it’s set by what the market will bear so this. may have no impact on rent rises. Why would a landlord not have already increased rent if they could find a tenant to pay the increased rent.

== Doublepost prevention - post automatically merged: 27 Nov 2025 ==

As a Landlord my tax on the income is going up from 20 to 22%, so that gives me two options:
Raise the Rent or sell one or more of the properties

Seems strange to me that you would be unable to bear the cost of an extra 2% tax on profit from property rent? Genuine question, I’m not trying to ‘make a point’.

And if you raise rent presumably the market can bear it where your property is located? (neighbours of mine renting moved out because landlord increased rent beyond what they wished to pay last year, house then stood empty for four months before rent was reduced to get another letting. Landlord concerned would have made more money by doing a deal with existing tenants and avoiding four months of no rent at all…).

 

[sor]

If it is specific to income tax, does this not just affect hobby landlords who expect someone to pay their BTL mortgages off for them, and not others who do it through a limited company (eg build-to-rent companies) and can already find other ways to extract their "profit" from their "hard work"?

 

[WesternLancer]

If it is specific to income tax, does this not just affect hobby landlords who expect someone to pay their BTL mortgages off for them, and not others who do it through a limited company (eg build-to-rent companies) and can already find other ways to extract their "profit" from their "hard work"?

Aiui yes, but smaller landlords do dominate the market. Build to rent organisations are not widespread. Some smaller landlords already register their portfolios as companies tho. I found that out when obtaining a land registry record of who owned a rented house near me. I assume they already do that for tax reasons but maybe their are other reasons to do so.

 

[Magdalia]

Excellent post.

Thanks!

But rent is not set like that, it’s set by what the market will bear

But changes in tax will affect "what the market will bear", through changes in behaviour prompted by the tax change. There are 2 main effects, working in opposite directions, and the overall outcome depends on which is biggest.

As a Landlord my tax on the income is going up from 20 to 22%, so that gives me two options:
Raise the Rent or sell one or more of the properties

At the margin, there will be some landlords who decide to sell. This will reduce supply of rental properties and lead to higher rents.

But those sales will increase the supply of property overall, and, other things being equal, should reduce house prices. This encourages people to switch from renting to buying, which will reduce demand for rental properties and lead to lower rents.

There is a timing issue too, because the sellers act first, so any increase in rents could be temporary.

 

[styles]

An increase to income tax as levied on the income from rents of a couple of percentage points.

Budget 2025: Landlord income tax rates to rise

Landlords will pay increased rates of income tax under plans announced by Chancellor Rachel Reeves today. Rates of income tax from property income will increase by two percentage points from April 2027, a move which the Office for Budget Responsibility (OBR) has recognised will hit landlords in...

www.nrla.org.uk

I don't totally understand the rationale behind this - her speech said "we want to move towards taxing all income the same" (paraphrased) then she introduced a change that, er, makes rental income taxed at 2p/£ higher than other income. It might have been as a proxy to applying national insurance to rental incomes as that is 2% above a certain cap?

To be perfectly honest I wouldn't like to be a landlord in England any more anyway.

Changes brought in recently mean tenants are forever on rolling contracts, rents can only be increased once a year and limited, and no-fault evictions have been barred, so if you've got an awkward tenant you now need to wait until you have proof of antisocial behaviour, which can be hard to gather, especially if neighbours don't want to go on the record.

The tax changes for landlords which have been added over the years make this even more difficult, though I would argue fairly so (e.g. not being able to claim mortgage interest payments as expenses to reduce tax).

The issue is though, unless house prices come down, the lack of rental supply and the tax changes will just hike rent prices. I'm sure voters will on the whole clap for higher taxes on landlords, but it's unlikely to help much.

 

[Tetchytyke]

Changes brought in recently mean tenants are forever on rolling contracts, rents can only be increased once a year and limited, and no-fault evictions have been barred, so if you've got an awkward tenant you now need to wait until you have proof of antisocial behaviour, which can be hard to gather, especially if neighbours don't want to go on the record.

That’s not really true.

All that’s happening is that most people who currently have an assured shorthold tenancy will now have an assured tenancy. Assured tenancies were the default until February 1997, and that was one of the worst changes the John Major government ever made.

The key difference is that there’s (generally) no fixed term with an assured tenancy and therefore s.21 won’t apply, as s.21 can only be used once a tenant is outside their fixed term.

All the other ways of evicting someone under s.8 Housing Act will still apply. But a landlord will need to apply to the court to do so. It is unlikely that an “awkward tenant” is paying their rent on time and maintaining the property and complying with their tenancy agreement, and failure to do all of those remains a valid ground to apply to evict a tenant.

== Doublepost prevention - post automatically merged: 27 Nov 2025 ==

As a Landlord my tax on the income is going up from 20 to 22%, so that gives me two options:
Raise the Rent or sell one or more of the properties

Assuming a net yield of £1000/month (after management fees, etc), the tax due will go from £200/month to £220/month. Any landlord who can't afford such a rise probably ought to sell anyway because if they're that close to the line then they're going to be completely screwed if/when major repairs are needed on a house.

I have one house rented out in a poorer part of the UK and my tax will be going up by a tenner a month. I think I'll cope.

 

[styles]

That’s not really true.

All that’s happening is that most people who currently have an assured shorthold tenancy will now have an assured tenancy. Assured tenancies were the default until February 1997, and that was one of the worst changes the John Major government ever made.

The key difference is that there’s (generally) no fixed term with an assured tenancy and therefore s.21 won’t apply, as s.21 can only be used once a tenant is outside their fixed term.

All the other ways of evicting someone under s.8 Housing Act will still apply. But a landlord will need to apply to the court to do so. It is unlikely that an “awkward tenant” is paying their rent on time and maintaining the property and complying with their tenancy agreement, and failure to do all of those remains a valid ground to apply to evict a tenant.

Except now it needs evidencing and without that tenants can stay as long as they want, as they don't have a fixed term.

I don't believe landlords should be forced to have tenants indefinitely, and I don't believe clogging up the courts with yet more cases just to evict awkward tenants is a good thing.

Assuming a net yield of £1000/month (after management fees, etc), the tax due will go from £200/month to £220/month. Any landlord who can't afford such a rise probably ought to sell anyway because if they're that close to the line then they're going to be completely screwed if/when major repairs are needed on a house.

I have one house rented out in a poorer part of the UK and my tax will be going up by a tenner a month. I think I'll cope.

While true, it's the compounding effects. I know of people who ummed and ahhed about becoming a landlord, or remaining a landlord, and eventually gave up on it as it was decreasingly worthwhile. For people 'on the fence', the tax change as well as the increased difficulty of removing problematic tenants will likely tip them over into selling up. The tenants won't be able to afford to buy the house, and it'll push rents up.

The law of unintended consequences will pay out big on these changes.

 

[Bletchleyite]

I don't believe landlords should be forced to have tenants indefinitely

They can still choose to take the house back to sell it or live in it themselves, though (the latter deals with needing a fixed term because you're renting out while going abroad on a fixed term contract, for example). Otherwise you're getting into personal dislikes, and on balance you probably don't want peoples' housing security affected by the landlord not liking them because e.g. they insist on their rights.

 

[styles]

They can still choose to take the house back to sell it or live in it themselves, though. Otherwise you're getting into personal dislikes, and on balance you probably don't want peoples' housing security affected by the landlord not liking them because e.g. they insist on their rights.

No but there is behaviour which falls just short of what a court might consider antisocial behaviour for example; or people who regularly pay their rent late but don't cross the 2 months threshold the courts require for evicting for non-payment; etc.

 

[Bletchleyite]

No but there is behaviour which falls just short of what a court might consider antisocial behaviour for example; or people who regularly pay their rent late but don't cross the 2 months threshold the courts require for evicting for non-payment; etc.

Indeed, though quite rightly we define in law when people can be evicted for stuff like that, otherwise you end up with stuff that the landlord perhaps unreasonably considers antisocial but the tenant does not, for example, which if not clearly defined in law becomes incredibly subjective and tends towards the kind of "popularity contest" which is a problem with rogue or unreasonable landlords, of which there are as many as there are bad tenants.

 

[styles]

Indeed, though quite rightly we define in law when people can be evicted for stuff like that, otherwise you end up with stuff that the landlord perhaps unreasonably considers antisocial but the tenant does not, for example, which if not clearly defined in law becomes incredibly subjective and tends towards the kind of "popularity contest" which is a problem with rogue or unreasonable landlords, of which there are as many as there are bad tenants.

Except it is at the end of the day the landlord's property. I don't see why they should have to put up with behaviour they consider unreasonable or incompatible just because the government wants a court to attempt to make it objective when it's not. As someone who has had antisocial tenant neighbours, I know first hand how little the police feel they can do about it; if that's replicated in the courts for eviction petitions then it's just going to empower antisocial tenants who don't meet the court's arbitrary threshold.

 

[Bletchleyite]

Except it is at the end of the day the landlord's property. I don't see why they should have to put up with behaviour they consider unreasonable or incompatible just because the government wants a court to attempt to make it objective when it's not.

Then, regrettably, you're not suitable to be a landlord, because that is basically a feudal relationship where the landlord holds all the power. The law, rightly, is moving to a more equal relationship between the two, and it's an important step in that that things that are unreasonable aren't simply a matter of the landlord's opinion but rather defined clearly in law.

I wouldn't see an issue with tightening the legal definition of what constitutes antisocial or late payment etc, but because of the balance of power issue here it's essential that the landlord is never the arbiter of what is reasonable.

 

[styles]

Then, regrettably, you're not suitable to be a landlord, because that is basically a feudal relationship where the landlord holds all the power. The law, rightly, is moving to a more equal relationship between the two, and it's an important step in that that things that are unreasonable aren't simply a matter of the landlord's opinion but rather defined clearly in law.

You can't define clearly in law what is unacceptable behaviour for a tenant. The book would be a hundred thousand pages. To think otherwise is, imo, naive.

Make no mistake - the unintended consequences of this will be reduced supply in the rental market and rents will go up. It's going to be bad for tenants.

 

[Bletchleyite]

You can't define clearly in law what is unacceptable behaviour for a tenant. The book would be a hundred thousand pages. To think otherwise is, imo, naive.

There are challenges, however it's never acceptable for the landlord to be the sole arbiter because there is a strong balance of power issue. A bad tenant can cost a landlord money, whereas a bad landlord can put a tenant on the street if given free rein in determining what is reasonable. Therefore the decision must be out of the hands of either of them.

I'm therefore in strong support of the measures being introduced - any landlord who doesn't accept them is in essence pretty much (give or take the odd minor procedural tweak) unsuitable to be a landlord and should sell up or consider switching to business property instead.

 

[styles]

There are challenges, however it's never acceptable for the landlord to be the sole arbiter because there is a strong balance of power issue. A bad tenant can cost a landlord money, whereas a bad landlord can put a tenant on the street if given free rein in determining what is reasonable. Therefore the decision must be out of the hands of either of them.

And now a bad tenant can cost a landlord much more money, mental wellbeing, community credit, property damage, and more.

This wouldn't stand in any other commercial context.

 

[Bletchleyite]

And now a bad tenant can cost a landlord much more money, mental wellbeing, community credit, property damage, and more.

This wouldn't stand in any other commercial context.

And that's fine, because no other commercial context allows one person (a landlord) to ruin someone's life to the same extent just because they don't see eye to eye on what's acceptable. Hence taking that decision out of their hands to an independent third party by way of the planned legislation is the only reasonable option.

If that means landlordism isn't for you, that's fine, invest in another way. But housing is a very, very special case and the landlord-tenant relationship, because of the relative consequences to each of a breach, is a very unbalanced one.

I'm open to discussions on changing the law with regard to when late payment allows eviction, for example, but not for a return to "the landlord can evict for any reason they feel like" - it's been abused by too many bad landlords now.