Andy Burnham is coming for your money – here’s where he is most likely | Personal Finance | Finance

During the 2024 election, Sir Keir Starmer and Chancellor Rachel Reeves said they would only increase three taxes totalling £8.5billion, on public schools, non-doms and energy companies. Once in power, they hit taxpayers for £70 billion. Burnham also played down talk of tax hikes. That could now change, and workers, pensioners, homeowners, savers, investors and landlords could all be in the firing line. So what do we know so far?

Over the years, Burnham has made several suggestions. Many of them would infuriate taxpayers and could prove complex to introduce. One notion he’s floated is a Land Value Tax, an annual charge based on the value of land rather than the property itself. Burnham has argued that this could replace stamp duty and council tax. The fear is that it could end up sitting alongside them instead. He’s also supported increasing the additional rate of income tax from 45% to 50%, hitting those earning above £125,140.

He’s also suggested hiking the capital gains tax to bring rates closer to income tax bands. Currently, basic-rate taxpayers pay CGT at 18%, while higher-rate taxpayers pay 24%. Under Burnham, rates could rise to 20%, 40% and 45%, threatening small business owners, buy-to-let landlords, second homeowners, non-ISA investors and Bitcoin holders. In another blow to landlords, Burnham has indicated support for charging National Insurance on rental income, which is currently exempt.

He’s previously backed the idea of a 10% inheritance tax levy on estates to help fund social care, saying everybody would pay, “but obviously the wealthiest would pay the most”. That might prove popular with some if it replaced the current 40% rate. The worry among critics is that taxpayers could end up paying both.

For small businesses, Burnham has admitted Labour “got it wrong” by hiking employers’ National Insurance, a move critics say has hit jobs and investment. He has also suggested cutting business rates for pubs, clubs and music venues. Once again, the question is how he would pay for it.

The impact will also depend on how financial markets react. Charlotte Kennedy, chartered financial planner at Rathbones, said he had a little room for manoeuvre. “Burnham would inherit the same difficult fiscal backdrop and quickly discover there are no easy wins, amid sluggish growth, stretched public services and strained public finances.”

Rathbones’ analysis suggests as much as £100 billion of wealth could either leave the UK or be redirected if Burnham introduces a wealth tax.

Maike Currie, vice-president for personal finance at PensionBee, said political uncertainty can quickly spread into pensions, mortgages and household finances, as seen during Liz Truss’s disastrous mini-Budget in 2022. “If the UK’s fiscal credibility comes into question or the prospect of an early General Election grows, investors may demand a higher return for lending to the UK, meaning a rise in interest rates across the board,” Currie said. “That would push up mortgage and annuity rates, affecting pension values.”

Samuel Mather-Holgate, managing director at Mather and Murray Financial, warned that sterling could fall. “A weaker pound drives up import costs and shrinks the value of your holiday money.”

Despite the risks, most of us should resist the temptation to make rushed financial decisions based on political drama and speculation. It’s best to wait until the facts are in.