Why the Treasury Keeps Looking at National Insurance

Every few months, someone at the Treasury “discovers” National Insurance again — usually when they need to raise money without appearing to raise taxes. It’s predictable, and it’s clever, because NI is the perfect middle ground between visible tax and quiet revenue grab.

Let’s unpack why it keeps coming up, and what it means for employers, workers and landlords.

1️⃣ The political disguise

National Insurance sounds like something you get back — pensions, sick pay, NHS.

That makes it far less toxic than calling it “extra income tax”.

But make no mistake: for most people, NI is income tax by another name.

Employees pay it, employers pay it, the self-employed pay it — yet politicians can tweak the rules and still claim “we haven’t touched income tax”.

That’s how we ended up where we are now:

• Employer rate up to 15 % from April 2025.
• Thresholds frozen.
• Wider talk about extending NI to other income types.

2️⃣ The self-employed gap

Roughly one in seven UK workers is self-employed. They pay less NI overall because there’s no “employer” contribution on their earnings.

From the Treasury’s point of view, that’s a hole — and holes are meant to be filled.

That’s why you keep hearing about bringing self-employed Class 4 NICs closer to employee levels, or inventing a brand-new charge on partnership and LLP profits.

It’s sold as “fairness”. In practice, it’s revenue.

3️⃣ The landlord problem

Rental income currently attracts no NI at all.

So, when the Chancellor promises not to raise “rates for working people”, it leaves a nice loophole: you can invent a new NI category on unearned income and say the pledge still stands.

If you own property personally, that’s worth watching.
Even a 5 % “contribution” on rental profits would raise billions — and quietly shift thousands of landlords towards incorporation or exit.

4️⃣ Employers as easy targets

Employers can’t move abroad, and they can’t vote.
So an extra percentage point here or a threshold tweak there often goes unnoticed by staff.
A 1 % change in employer NI raises more money than most headline tax moves — with far less political pain.

If you run payroll, it’s already eating into margins.
Expect the pressure to continue, particularly through PSAs and benefits-in-kind rules.

5️⃣ Data makes it easy

NI is collected in real time through payroll and digital records.
It’s efficient to administer, hard to avoid and cheap to enforce.
From a policymaker’s point of view, it’s almost irresistible.

That’s why we’ll likely see integration — pulling benefits and expenses into payroll, merging NI classes, or eventually combining NI and income tax entirely.

⚙️ What to take from this

• NI isn’t going anywhere — expect the base to widen rather than the rate to rise.
• Employers should plan for the long game: higher costs per head and fewer reliefs.
• Self-employed clients should budget as if NI parity with employees is only a matter of time.
• Landlords should at least run the numbers: “What if rent became NI-able?”

And remember: whenever a Chancellor says “we’ve kept our promise not to raise income tax”, the translation might be “we’ve changed National Insurance instead.”