A new, increased rate of Income Tax is set to be paid by people with extra income from 2027, replacing the 20%, 40% and 45% brackets with new, higher amounts.

One of the key announcements in Chancellor Rachel Reeves ’ Autumn Budget on Wednesday centred around a new Income Tax rule specifically for people with extra property or savings income, such as landlords.

There had been speculation that Ms Reeves may introduce National Insurance tax on property income, which could have seen either a 6% tax (the rate paid by self employed people) or an 8% tax (the current rate for PAYE income). Instead, from April 2027, those with property income will pay a new, higher rate of Income Tax on their rental property equivalent to an extra two percentage points on Income Tax .

Martin Lewis issues

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