Future of UK personal tax: What an Andy Burnham Government could mean

What would an Andy Burnham premiership mean for UK personal tax policy?

Given the latest shenanigans in Westminster, our clients are sensibly asking what the likely change in leadership will mean for UK personal tax policy, and as a result, for their own financial position. In this article, we unpick Burnham’s record on tax policy, the signals and statements that may indicate the likely direction of travel. 

There is an identifiable, consistent theme running through Burnham’s record – his long-standing belief that the UK tax system is structurally unbalanced. He argues that “We over-tax labour, people’s work, and we under-tax people’s assets”. While this generally aligns with the Starmer/Reeves administration's overriding message, Burnham’s tax-and-spend manifesto seems likely to be more radical than that of the departing government.  

How could taxes change under Burnham?

It seems likely that a Burnham premiership would:  

1. Tax the owners of high-value properties. With English council tax bands still based on property valuations dating back to 1991, Burnham argues that the current system is outdated and not fit for purpose. Reforms may involve restructuring council tax, changing stamp duty and/or a more general increase in the taxation of property wealth…he has “long been persuaded of the argument for a land value tax”. Clients with property-heavy portfolios should be paying close attention to any likely changes to the taxation of landlords and other property investors. 
    
2. Steer away from increases in earnings-based taxes. Burnham has explicitly confirmed that he would broadly honour Labour’s manifesto commitments – no increases in income tax, VAT or employee National Insurance (in a Newsnight interview, he contemplated reconsidering the increase in employers’ NICs which was announced in Rachel Reeves’ first Budget on 30th October 2024).  
    
3. Continue commitment to existing fiscal rules and debt constraints. Market reaction to the changing of the guard has so far been relatively constrained, not least because Burnham has sought to reassure investors by promising to stick to the existing budget rules set by his predecessors.  
    
4. Re-examine the taxation of wealth. Higher capital gains tax rates and their alignment with income taxes are back on the agenda. In addition, Burnham has floated the idea of replacing Inheritance Tax with a ‘care levy’ on estates in order to finally establish the National Care Service – first legislated back in 2010 when Burnham was Health Secretary during the closing days of Gordon Brown’s government. That said, he has not endorsed a broad wealth tax and says it is not among his immediate priorities. 

What could this mean for UK taxpayers and investors?

Burnham’s personal tax agenda would appear to be a reallocation of the tax burden away from labour and small businesses and towards property, land and certain forms of wealth rather than higher overall taxation. He looks set to continue the strict fiscal framework he inherited from Rachel Reeves, but will certainly feel the pressure to do so. 

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If you’re concerned about how potential tax changes could affect your wealth or investments, our tax team can help you plan with confidence. Reach out today to see how we can support you.