Burnham’s inheritance from the Starmer administration already included a £4.7bn gap in funding for defence and he has lost no time in making further costly promises on bus fares, fuel bill VAT and business rates. Questions on the funding for those promises have been raised so it seems the new administration will have to get used to intense scrutiny. The ‘difficult choices’ that Starmer faced have not gone away and Burnham may well look for tax rises to fund at least part of his programme.
Timing
Having appointed John Healey as Chancellor of the Exchequer, the next step will be to put a Budget together. For context, it’s worth thinking about when that Budget might happen. Any fiscally significant event has to be shared with the Office for Budget Responsibility (OBR) who require a minimum of 10 weeks to prepare their forecasts; that would take us through to late October at the earliest. If the pattern of the last two years is followed, that delay will stimulate a summer of speculation, resulting in taxpayers taking tax-motivated decisions which ultimately turn out to be detrimental. There is pressure to avoid a rerun of 2024 and 2025.
That said, any change is unsettling and we know that our clients are starting to think about how they may be impacted by the new government[KH1] [CM2] . With that in mind, we are sharing below what we can glean about Burnham’s fiscal policies. Announcements have been issued at pace in the short time that Burnham has been in office and we will update as more detail emerges.
What has Andy Burnham said about tax?
Very little on direct tax so far. His recent speeches gave no commitments on tax, so we need to look to earlier statements for clues to his fiscal policies. He is, however, on record as saying that he’ll stick to the 2024 manifesto pledge of no income tax, NIC or VAT rises, which means that, like Rachel Reeves, John Healey will be looking at other taxes to make up any deficits.
Capital gains tax (CGT)
Burnham is understood to favour the equalisation of CGT and income tax rates. There are two main problems with that. Firstly, if people perceive the CGT rate as excessive, they simply hold onto assets, strangling the property market in particular. The second is that, unless some inflation adjustment is built into the calculation, much of the gain being taxed is down to inflation. Nigel Lawson’s equalisation of rates with an inflation adjustment was ultimately repealed as it failed to raise significant additional revenue.
Another possibility is introduction of an exit CGT, so that those emigrating pay tax on the gains that they’ve made whilst UK resident. Some countries do this. Arguably it’s an ‘easy win’ which would affect those leaving the UK rather than most voters, but it might discourage the wealthy from coming to the UK in the first place.
Any hike in CGT rates is most likely to affect those holding assets like property and shares, although those trying to sell a business could also find themselves paying more. CGT hikes usually take effect from Budget day, so earlier disposals are taxed under the current regime.
Council tax and Stamp Duty Land Tax (SDLT)
Burnham is amongst the many who regard council tax as ‘regressive’. It is still based on 1991 valuations and creates anomalies like the semi in Blackpool that pays more council tax than a Mayfair mansion. It’s argued that a ‘land value tax’, based on the annual rental market value, would be fairer, encourage better land use and potentially allow for the abolition of SDLT.
Anyone moving house will understand that SDLT has become a major cost, so abolition would smooth the process for land transactions and potentially ease social and economic mobility. However, uncertainty over its abolition could impact the property market and Burnham has now said that ditching SDLT ‘won’t be happening’.
Taxing land should be relatively easy given that it doesn’t move, but it does still need to be valued, which would be a major cost headwind before the government saw any of the increased revenue. It’s also unclear how such a tax would interact with the ‘mansion tax’ due to take effect from 2028. As proposed by Rachel Reeves the tax will affect those with properties valued at over £2m; there is talk of reducing that threshold to £1.5m which would clearly bring many more properties into scope.
Inheritance and wealth taxes
Burnham has observed that wealth is taxed more lightly than labour in the UK. As yet he has neither proposed nor ruled out a wealth tax, although the land value tax would to some extent tick that box. The press has reported that he is willing to ‘look again’ at IHT agricultural relief for farmers. It’s not clear whether that would also extend to businesses.
Burnham continues to call for a national care service, which would, like the NHS, be free at the point of use. He has previously proposed a 10% social care levy on all estates, which would significantly broaden the tax base and could raise some £18bn. Whether this would overlap with or replace the present IHT regime remains to be seen, but Burnham’s by-election campaign message was that ‘obviously the wealthy would pay most’ and the devil will be in the detailed numbers.
Business taxes
The one mention of tax in Burnham’s recent speech in Manchester was the review of business rates to support physical businesses – pubs and high street retail – and this now seems to be taking shape with the announcement of a 20% cut in business rates for pubs, clubs and music venues from April 2027. Anything that can be done for physical high street businesses would also be welcomed.
Adherence to the 2024 manifesto would rule out increases in corporation tax.
Action now?
Given that Andy Burnham has said so little on tax issues, it is premature to develop a strategy for dealing with his government’s tax policies. Our approach is that clients should do what is consistent with their goals and objectives, and avoid taking any action which they would not be considering but for tax change rumours. It will be good to keep that policy in mind over the next weeks and months if speculation on the new government’s tax policies dominates the headlines.
Clare Munro is our Senior Tax Adviser. Within her day-to-day role, she provides tax advice to high-net-worth clients in relation to their banking and wealth management needs. With a particular interest in inheritance tax and capital gains tax planning, Clare helps clients to structure their wealth tax efficiently to preserve it through family generations.
What you need to know
Tax laws may change and taxation will vary depending on your own personal circumstances.
Investments can go up and down in value and you may not get back the full amount you invest.
Updated on 29th July 2026