Do landlords pay National Insurance on rental income?
No. Rental income has never been subject to National Insurance, and the government confirmed at the Autumn Budget on 26 November 2025 that it won't introduce one. Instead, it raised income tax rates specifically on property income.
Why This Was Ever a Question
Back in 2025, HM Treasury was reportedly weighing up an 8% National Insurance charge on rental profits, floated as a way to close what it called an unfair gap between income from work and income from property. Landlords earn roughly £27 billion in rental income a year, so even a partial charge would have raised billions for the Exchequer.
It didn't happen. At the Autumn Budget on 26 November 2025, Chancellor Rachel Reeves confirmed there would be no National Insurance on rental income. If you searched this page worried about an NI bill landing on your property income, you can rule that out. What you can't rule out is the alternative the government chose instead, which costs many landlords more over time than an 8% NI charge would have in year one.
What the Autumn Budget 2025 Actually Changed
Rather than extending National Insurance to landlords, the government introduced separate income tax rates for property income, set two percentage points above the standard rates. They apply from 6 April 2027, giving landlords roughly 18 months' notice from the announcement.
The existing income tax thresholds aren't moving. The personal allowance stays at £12,570, the higher rate threshold at £50,270, and the additional rate threshold at £125,140, all frozen since 2021/22 and due to hold at those levels for the personal allowance until 2030/31. That freeze already pulls more landlords into higher bands as rents rise. The 2027 rate change adds a second squeeze.
Limited companies aren't affected. Property held through a company still pays corporation tax rather than income tax, which is part of why incorporation has stayed a live conversation for portfolio landlords over the past few years. It's not the right call for everyone, and it comes with its own costs.
What It Actually Costs
Take a landlord with £30,000 of taxable rental profit, taxed at the higher rate. From April 2027, the extra 2 percentage points add £600 to their annual tax bill, about £50 a month. Someone with £60,000 of profit at the higher rate faces an extra £1,200 a year. Compare that with the 8% NI charge once under discussion: on £30,000 of profit, that would have added £2,400 in year one. The rate rise is smaller per pound. But it's permanent; it stacks with frozen thresholds, pulling more income into higher bands each year, and it arrives alongside the mortgage interest restrictions already in place under Section 24.
What's Still on the Table for Autumn Budget 2026
The next Budget lands on 28 October 2026. Nothing published so far reopens the National Insurance question; HM Treasury settled that at the last one. A couple of property-related measures are still under discussion rather than confirmed:
- A possible reduction to the £2 million threshold for the new High Value Council Tax Surcharge (due to launch in April 2028), which currently starts at £2,500 a year and rises to £7,500 above £5 million.
- Capital gains tax changes, with some speculation about aligning CGT rates more closely with income tax.
Both are speculation at this stage, not policy. We'll update this page again once anything is confirmed.
What Landlords Should Do Now
Run the 2027 change against your own portfolio, not a generic example. If your rental profit sits in or near the higher-rate band, work out what an extra 2 percentage points actually costs you now, rather than in March 2027. Frozen thresholds already push more of your income into that band each year, so the starting point may have shifted since you last checked.
The company-versus-personal-ownership question is worth another look, too. It's not new, but the 2027 rise changes the arithmetic slightly for anyone who dismissed incorporation last time round. Whether it stacks up still comes down to your mortgage position, portfolio size, and exit plans.
What you shouldn't do is restructure on the strength of speculation. The mansion tax threshold and CGT changes floated for Autumn Budget 2026 aren't confirmed, and acting on rumour has burned landlords before: several sold up in 2025 ahead of an NI charge that never arrived.
Confirmed changes are the ones worth planning around. That's where Abode Accounting comes in. We work exclusively with letting agents and landlords, so we're already tracking how each Budget change lands on a real portfolio, not just the headline figures.
How Abode Accounting Helps
We specialise in accounting for letting agents and landlords, and our client accounting services cover the property-specific work a general accountant typically doesn't: client money reconciliation, ARLA-compliant reporting, and now, modelling what the 2027 property income tax rates mean for your actual portfolio rather than a generic example.
If you want to know what the 2027 change costs you specifically, or whether restructuring is worth it for your circumstances, get in touch, and we'll run the numbers.
