What could Andy Burnham do to raise tax...

Andy Burnham has quickly taken charge of Number 10 and the newly established Number 10 North over the past few months. The next budget is set for 28 October, and therefore nervousness is growing about what tax increases we may see.

There are serious challenges in the cost of living for the UK public, crumbling public services, and getting growth into the UK economy.

We have already seen the prime minister launch several initiatives to ease pressure on the cost of living and general economy. These were all spending / tax cut initiatives which will need balancing in the books this coming October.

The below sets out what we think you should be watching for, and whether there is anything to be focusing on in the next month.

Andy Burnham is committed to the Labour Manifesto and therefore we shouldn’t anticipate any material changes. The PM has previously raised the idea of increasing the income tax personal allowance. This would be a costly idea and is probably why, since coming to office, it seems to have been sidelined.

There have been some announcements on how tax revenues will be distributed amongst central and regional governments / councils with indications we will see more money going back to the councils

In previous budgets we have seen reforms and increases to CGT rates. There is significant concern that we could see a rise to CGT rates again.

Some seem to be worried that these rates could rise in line with income tax rates, but we could see this also offset by the return of some sort of indexation relief.

Whilst it is usual for budgetary changes to tax rates to be applied from the start of the next tax year, if you are considering a disposal of assets and can bring forward the sales date to before Budget Day, this should be considered with appropriate legal and tax advice.

We have seen significant changes to IHT since the Labour government came into power.

During the Makerfield by-election, Andy Burnham said that the enacted April 2026 reforms needed reviewing because they were not achieving their goals, and they were impacting family farms.

The PM has previously proposed funding a National Care Service with a care levy of 10% payable on everyone’s assets. This has not been repeated since his emergence as a prime ministerial candidate but could be seen as a way of offsetting the growing social care need.

There seems to be traction around the idea of abolishing both stamp duty land tax and council tax and replacing this with an annual land value tax.

This sort of reform could have a materially negative impact on the rural economy, and the devil would be in the detail as to whether exemptions would apply to farms, and what is / isn’t included within this tax.

A tax on wealth has been discussed, and it seems many within the Labour Party support this type of tax.

Gary Stevenson, a former city trader and prominent voice for this proposes a 2% annual wealth tax on individuals in the UK with total net assets exceeding £10m.

A wealth tax would have a significant impact on farming and landed estates clients. In practice, it would also be hard to implement and manage.

For those concerned with this type of tax, you could consider how your family wealth is held, but take care that tax doesn’t drive business decisions.

We are likely to see rises to tax in October, as currently it seems difficult to understand where the big raises will come from.

By committing to the Labour manifesto, Andy Burnham has narrowed his ability to raise revenue. We can hope if we see any big change to wealth or land value tax that the government will learn from the poorly announced and managed IHT reforms and seek consultation before making decisions.