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Income Tax, VAT and NI Look 'Safe' Under a Burnham Government. So Where Would a Bigger State Get Its Money?

ended 01. July 2026

Andy Burnham is on course to be Britain's next Prime Minister, the frontrunner in a Labour leadership contest that runs through July, and he arrives with a bigger-state agenda: more public ownership, more spending and more devolution to the regions. He has said he will broadly honour Labour's manifesto promise not to raise the three taxes most people watch: income tax, VAT and National Insurance.

But a larger state has to be funded, and that points to the other side of the system: taxes on what people own and save rather than what they earn. Allies close to him are already pushing for higher capital gains and inheritance tax, with capital gains brought closer to income-tax rates. He has historically floated a return of the 50p additional rate for the highest earners, though he has recently said he has no plans to raise marginal income-tax rates further, and has talked about easing the burden on lower earners by lifting the frozen £12,570 personal allowance, which quietly drags hundreds of thousands more people into higher tax every year.

It echoes a pattern savers have just seen confirmed by the current government: from April 2027, a 22% charge will apply to interest on cash held inside stocks-and-shares and other non-cash ISAs, so the headline reliefs stay intact while a quieter change does the work. The recurring concern is that the people caught by this drift are rarely the very wealthy, but owners of a home, a pension and a modest portfolio who never thought of themselves as a target.

  1. If the headline rates stay put but capital gains, inheritance and savings taxes rise to fund a bigger state, who actually ends up paying, and is that fair?
  2. What should clients with a home, a pension or a modest portfolio be doing now to prepare, rather than waiting for a first Budget under a new PM?
  3. Are you already seeing clients act on this shift from taxing income to taxing wealth? If so, please share as much colour and detail as possible.

7 responses from the Newspage community

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Harvey Dhillon
Founder & CEO at Zmartly
When a government protects income tax, VAT and National Insurance but still wants to spend more, the money has to come from somewhere. It comes from the taxes most people do not watch: the gain when you sell, the value of your estate when you die, the interest on your savings. A frozen allowance is a tax rise that is never announced. The £12,570 personal allowance is frozen until 2031, so every pay rise drags a little more into tax, and from April 2027 the interest on cash inside an investment ISA will be taxed at 22 per cent. None of this lands on the very wealthy, who plan around it. It lands on the person with one rental, a pension and a bit put by. My advice is simple: do not gamble on what a Budget might do, use what you already have. Take this year's ISA and pension allowances, keep records of what your assets cost you, and review your estate while the rules are known.
—Harvey Dhillon, Founder & CEO at Zmartly Accountants
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Samuel Mather-Holgate
Managing Director & IFA at Mather and Murray Financial
If the big three taxes are supposedly in a tight jacket, the squeeze may come through higher marginal rates, tiered National Insurance, business rates and corporation tax. Push the top effective tax rate towards 60% and the Treasury risks learning an old lesson- taxpayers and businesses are not trees. They can move, invest less, hire less or structure around the rules. That does not mean wealth should never be taxed, but it does mean policy has to be careful rather than performative. Clients should avoid knee-jerk decisions, but higher earners, business owners and investors should review pension use, company structures, extraction strategy and where assets sit. Once confidence leaves the UK, getting it back is far harder than taxing it away.
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Tony Redondo
Founder at Cosmos Currency Exchange
Everything Andy Burnham proposes was tried 60 years ago by another Lancashire PM from the North: Harold Wilson. In 1966, UK debt was 84% of GDP and falling; it's now 95% and rising. If Wilson's policies didn't work then, why would they work now? Despite Burnham's supposed charisma over Starmer, the message is unchanged. A bigger state and more taxes on the only economic agents producing wealth, even as Britain endures its highest tax burden since the 1940s. Ironically, Burnham, Starmer, Reeves, and Rayner all grew up in Thatcher's Britain, when free enterprise drove the nation forward in leaps and bounds. The shift from taxing income to targeting accumulated assets via frozen thresholds, higher CGT, and the 2027 ISA interest tax will be the enterprise's death knell. Wealth now moves at the touch of a button, and the wealthy are already acting defensively: harvesting gains, divesting from buy-to-let, moving capital offshore.
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Graham Nicoll
Financial Planner, Chartered FCSI at NCL Wealth Partners
Speculation isn't fact and should not underpin a financial plan or financial decisions.

While investors should stay informed, making knee-jerk decisions based on leadership contests is rarely wise.

Tax policy remains uncertain and politicians, including Andy Burnham, just like Keir Starmer, have shown they're willing to change position.

It is important to review estate, pension and investment plans regularly, but wait for actual policy before making major tax-driven decisions.
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Nouran Moustafa
Practice Principal & IFA at Roxton Wealth
Taxing wealth is sold as a levy on the wealthy. In reality, those most exposed are often Britain’s successful middle: people who have paid down a mortgage, built a pension, inherited a modest family home or invested outside an ISA. They are not sitting on offshore fortunes. Their assets grew over a lifetime, often from income already taxed once.

A bigger state has to be paid for, but the debate needs honesty. Bringing capital gains closer to income-tax rates or tightening inheritance tax may sound clean politically. In practice, it changes the calculation for a widow selling shares, an entrepreneur exiting a business or children trying to keep a family home after a death.

Clients should not panic or make irreversible moves on rumours. But they should get organised: use ISA and pension allowances, review ownership, update wills and keep records. More clients are asking: “Have I accidentally become exposed?” Government must answer that before treating prudent saving as a soft target.
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Paul Denley
CEO at Oakham Wealth Management
The net is widening rather than narrowing: frozen allowances and thresholds draw in more ordinary savers with a home, a pension and modest savings, even as the wealthiest often have greater access to specialist tax planning. There's a well-established lesson in tax policy: people change their behaviour, meaning the revenue ultimately raised can differ materially from forecasts. Higher CGT can discourage asset sales, while IHT pressures often encourage earlier gifting and succession planning. We're encouraging clients to act while today's rules apply: using ISA and pension allowances, reviewing gains and bringing forward gifting where appropriate. The aim isn't to predict the next Budget, but to make future tax changes matter less.
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David Stirling
Independent Financial Adviser at Mint Wealth
The British government has spent years perfecting the art of looking you in the eye, promising not to raise your taxes, while simultaneously hiring someone to go through your pockets from behind. Andy Burnham, the frontrunner to be next Prime Minister, is already following that script: income tax, VAT and National Insurance safe, everything else apparently fair game. Capital gains edging towards income tax rates, inheritance tax tightening, and a 22% charge quietly introduced on cash interest inside ISAs, because apparently saving responsibly is now a lifestyle choice that needs discouraging.