Apply NI to investment income

Policy baseline

The Green manifesto proposes higher taxation of investment income and removing the NI upper earnings limit. Incidence is broad, not only ultra-rich.

• Targets dividends, savings, rents and high earnings.
• Tax-base design is not fully specified.
• Work and saving incentives may change.

Core trade-offs

The direct beneficiaries are the exchequer and equal taxation of income sources. The costs fall mainly on investors, landlords and higher earners. The main economic question is broad tax rises can reduce saving and work incentives.

• The exchequer and equal taxation of income sources gain most directly.
• Costs fall mainly on investors, landlords and higher earners.
• Key risk: broad tax rises can reduce saving and work incentives.

Fiscal impact by 2028-29

-GBP 40.0bn to -GBP 5.0bn. Central estimate: -GBP 20.0bn.

• Positive numbers mean net fiscal cost; negative numbers mean Exchequer savings.
• Main channel is the scored tax, spending or delivery change.
• Offsets depend on tax receipts, behaviour and pass-through.
• Range reflects uncertain implementation and economic response.
• This is not an official costing.

Economic impact by 2028-29

• Jobs: Little direct job effect; sector-specific taxes can reduce hiring in affected industries.
• Wages: Legal taxpayers may shift costs to workers, owners or consumers over time.
• Prices: Some pass-through likely where market power or fixed demand exists.
• GDP / productivity: Usually mildly negative before spending use; stronger if investment or mobility responses rise.

Assessment

This is a real trade-off, not a free gain. The exchequer and equal taxation of income sources benefit, while investors, landlords and higher earners bear most costs. Overall output depends on behaviour, capacity and pass-through.

Confidence: Medium-low. Higher on the policy target and fiscal channel; lower on behaviour, pass-through and economy-wide effects.

Main risks

• Behavioural response: Avoidance, timing and relocation can reduce receipts.
• Incidence uncertainty: Legal taxpayers may shift costs to workers, consumers or investors.
• Investment risk: Higher taxes can reduce investment where returns are mobile.

Safeguards

• Use HMRC microsimulation before legislating.
• Close avoidance routes before rate rises.
• Review receipts and investment annually.

Academic evidence

UK government evidence

Sources

• PolicyLens illustrative scenario methodology for apply ni to investment income Internal - PolicyLens, 2026
• Green Party manifesto: a reaction Think tank analysis - Institute for Fiscal Studies, 2024
• Green Party manifesto summary Manifesto summary - Local Government Association, 2024
• Tax by Design Academic review - Mirrlees and review team, Institute for Fiscal Studies, 2011
• The Elasticity of Taxable Income with Respect to Marginal Tax Rates Academic article - Saez, Slemrod and Giertz, Journal of Economic Literature, 2012
• Direct effects of illustrative tax changes Tax statistics - HMRC, 2025
• Manifesto for a Fairer, Greener Country Party policy source - Green Party of England and Wales, 2024

Other Green policies

• Raise the minimum wage to £15
• Index public-sector pay to inflation
• Add public-pay restoration premiums
• Raise low-paid public-sector wages
• Cap organisation pay ratios at 10:1
• Protect pay in transition schemes
• Create a single worker status
• Equal terms for outsourced workers