St Rachel is the patron saint of mansplaining and misogyny.
The gospel according to St Rachel was uttered [leaked] on the holy High Shambles Budget day of 26th November 2025.
Her words of wisdom were delivered unto electorate ( that she believes is stupid):
"Currently, a landlord with an INCOME of £25,000 will pay nearly £1,200 less in tax than their tenant with the same salary… because no National Insurance is charged on property, dividend or savings income. It’s not fair that the tax system treats different types of income so differently… "
Hang on - since when was rental income earned income?
The message has always been that rental income is investment income therefore cannot be earned income and therefore national insurance should not apply.
I suppose the one thing St Rachel accidentally let slip is that National Insurance is a TAX and nothing more.
So let's work though the numbers using Rachel's example.
So let's take someone earning £25,000 salary per year [the tenant in her example]
Income £25,000
Tax free £12,570
£12,430
Tax @ 20% £2,486
NI@8% £994
Total TAX £3,480
Now a landlord with "SAME SALARY"
Rental income £25,000
Tax free £12,570
£12,430
Tax @ 20% £2,486
NI@8% £0
Total TAX £2,486
Difference £994
Hang on St Rachel - you said a LANDLORD would pay £1,200 less in TAX yet they are only paying £994 less in tax. How come ? I know you're a maths champion (correction chess champion that came 26th of 33) but can't you do basic maths? The difference is £994 not £1,200.
Are you telling untruths? Or are you really bad at maths?
I guess it should be pointed out that the tenant on £25,000 would probably be eligible for a range of benefits (like Council Tax Reduction or Housing Benefit) whereas the landlord, because of ownership of property, would absolutely not be eligible for ANY benefits. Using an on-line calculator it said the tenant could receive £75.04 per month in tax free Universal Credit. So the "poor exploited tenant" is £900.48 better off which is pretty close to the £994 difference.
Returning to National Insurance. St Rachel seems to have forgotten that if the landlord is past retirement age they dont have to pay national insurance since they are retired.
So adding 2p (2%) extra to the basic rate of tax will raise a further £249 in tax. It still does not make it equal (and why should it be equal - the landlord is taking a risk). So therefore according to St Rachel this cannot be fair. Equally stealing tax from landlords removes cash from the "business" for unexpected boiler breakdowns, changes to legislation like EPC etc which requires investment in the asset.
Factor in welfare benefits and the tenant is significantly better off.
The real intent of this tax increase was to hit 40% tax payers who have leveraged rental properties. The 2p is effectively multiplied given Section 24 does not allow full interest relief. For a 40% tax payer you can be paying tax on losses and this move increases the tax on losses.
So let's take a look at dividends.
In order for a company to pay [distribute] dividends they need to pay tax on this first.
For UK based companies, the various taxation rates are becoming increasingly complicated.
Lets start with the simple rate which is 19%.
If a company's profits exceed £50,000 then the marginal rate of taxation is 26.5%
For profits in excess of £250,000 then the taxation rate is 25%
Investment companies are taxed at 25%
So when an individual receives dividends they are taxed again. So profits which have already been taxed and then further taxed.
20% tax payer rate 8.75% => 10.75% from April 2026
40% tax payer rate 33.75% => 35.75% from April 2026
Higher rate 39.35% => 41.35% from April 2026
It's pretty easy to see that the dividend taxation rates are "unfair". The jump in tax for income tax between bands is 20% ie from 40% - 20% = 20% yet dividend tax jumps 25% from 8.75% to 33.75.
So returning to the gospel of St Rachel she said that it was unfair for dividend income to be unfairly taxed.
So let's assume someone receives £25,000 in dividend income and it came from a small company taxed at 19%.
Income £25,000
Company profits £30,864
Tax @ 19% £5,864
Tax free £12,570
Taxable £12,430
Tax rate 8.75%
Dividend tax £1,088
Total Tax £6,952
Hang on! Wasn't the tax a worker paid on the same income only £2,486. Surely this can't be right?
Well let's assume someone receives £25,000 in dividend income and it came from closed investment company taxed at 25%
Income £25,000
Company profits £33,333
Tax @ 25% £6,333
Tax free £12,570
Taxable £12,430
Tax rate 8.75%
Dividend tax £1,088
Total tax £7,421
Surely this cannot be correct? The total tax paid on a £25,000 income is £7,421 yet salaried workers only paid £2,486. This unfairness should be corrected by St Rachel and salaried workers need to pay significantly more tax to correct this unfairness.
Of course St Rachel has decreed that dividend income tax should also rise by 2% from 8.75% to 10.75%. This increases the tax paid for these two scenarios to £7,200 and £7,669.
And of course we havent even considered the marginal 26.5% marginal corporation taxation rate which would be even worse.
What is clear from this is St Rachel lives in her own mythical world of fairness contradictions.
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