Sir Keir Starmer’s resignation announcement paves the way for the seventh UK Prime Minister in a decade. The Labour Party will now launch a leadership contest to replace Sir Starmer, with press reports focusing on Andy Burnham as the most likely successor.
What will that mean for UK taxation? The autumn budget will be due within a couple of months of the new Prime Minister taking office, and perhaps we will have a new Chancellor by then too.
At this early stage we cannot know what will happen, either in Downing Street or with the future UK tax reforms. For the moment, however, we can take a look at Andy Burnham’s previous comments on tax and summarise his views to date.
Income tax
Mr Burnham has previously repeatedly ruled out increases to the basic, higher and additional rates for most taxpayers, but has suggested a return of the 50p additional rate for the highest earners. He has also spoken about reducing the tax burden on lower earners through a higher personal allowance and/or the reintroduction of a 10p starting rate of income tax.
National Insurance
He has criticised increases in employer National Insurance contributions and has indicated he would seek to reverse or soften them, particularly where they affect jobs and small businesses. He has pledged not to increase employee National Insurance.
VAT
Mr Burnham has generally supported Labour’s commitment not to raise VAT. He has also floated targeted VAT reductions for sectors such as hospitality, to support pubs, restaurants and local high streets.
Property tax
In the past, Mr Burnham has expressed support for replacing or substantially reforming council tax and stamp duty through a land value tax or broader property-value-based taxation. He has endorsed proposals that would tax homes according to their current value rather than outdated bands. He has described this as a form of taxing wealth held in property, backing an idea to abolish or replace them with an annual property tax linked to property values.
Inheritance tax
This could be particularly interesting, since Mr Burnham has previously suggested significant reform rather than simply increasing rates. Options he has discussed include replacing the current inheritance tax regime with a simpler flat-rate estate levy and reviewing recent changes affecting farmers. He has also linked inheritance tax reform to funding social care.
Wealth taxes
Here Mr Burnham’s position has been less definitive. He has argued that the UK “overtaxes labour and under taxes wealth” and has supported higher taxation of expensive property, but has stopped short of endorsing a broad annual wealth tax on all assets.
Capital gains tax
While Andy Burnham has not published a detailed capital gains tax policy, groups and allies associated with him have proposed increasing or reforming capital gains taxation, reflecting his broader view that wealth should be taxed more fairly relative to earned income.
Business rates
Mr Burnham supports reducing business rates, particularly for hospitality businesses, and has suggested abolishing them for some smaller retail businesses to help revive local high streets and town centres.
In summary, Andy Burnham’s tax philosophy is broadly: lower taxes on work and lower earners, higher taxes on high-value property and wealth, major reform of council tax and stamp duty, and relief for smaller businesses.
It is too early to speculate much on the future direction of UK taxation following Sir Starmer’s resignation. The above only summarises previous comments made by Mr Burnham, and we still need to see who steps forward for the leadership contest and what policy ideas they share with the media and public.
Our experts are keeping a close eye on developments, and we will share an update in due course. In the meantime, if you would like to discuss UK tax planning strategies, please complete our enquiry form.
