After Keir Starmer’s resignation on June 22, 2026, Andy Burnham is expected to take over as the new Prime Minister of the UK this month. Burnham’s words make it obvious that the Labour Party would keep all of its commitments on income tax, value added tax (VAT), and national insurance in its platform. Yet, Burnham has left the door open to considering reforms in other areas of taxes. The administration has not yet made any public announcements regarding changes to tax rules. However, Burnham acknowledged the “room for movement” as the administration determines its financial objectives. Small company owners, freelancers, employees, landlords, and investors should keep an eye on the changing policy position.
Business Rates Reform
Burnham’s most specific tax proposal is a cut in corporate taxes. Burnham intends to reduce them by 20% for pubs, clubs, and music venues. He plans to fully abolish them in favour of smaller high-street cafés, stores, and hairdressers. Furthermore, Burnham intends to raise the threshold at which people begin paying business rates for the first time since 2017. This will bring extra benefits to small enterprises in the retail, leisure, and hospitality industries.
To offset these costs, the Labour Party intends to raise business rates for massive out-of-town warehouses used by major internet retailers. Labour also intends to increase the amount paid by owners of long-standing vacant high-street buildings. These measures have yet to become legal, and the timing of adoption is undetermined. However, lower fixed operational expenses will be advantageous to companies that presently pay business rates.
Employers’ National Insurance
Burnham has condemned the rise in employers’ National Insurance costs proposed in the October 2024 budget. He believed the move was improper and has requested that it be reconsidered. For small and medium-sized businesses that have been paying more for their employer National Insurance payment since April 2025, this is one of the most important tax signals to pay attention to.
If there is a cut or repeal, firms will benefit from decreased payroll costs. The move will have the greatest impact on industries that employ a large number of workers, such as retail, hospitality, care, and construction. Yet, Burnham has not made any official promises. The modifications would need to be mentioned in a forthcoming budget.
Capital Gains Tax
While Burnham has adopted a less proactive approach to Capital gains tax than others in the Labour Party, rumours indicate that Burnham’s transition team is considering more CGT measures to collect additional revenue. Labour MP Louise Haigh has asked for CGT rates to be more equivalent to income tax rates. However, the party has yet to put up any specific proposals.
Since the October 2024 Budget, the CGT on the sale of residential property has been fixed at 18% for basic rate taxpayers and 24% for higher rate taxpayers. For the majority of capital gains from the sale of investments and other chargeable assets, the rate is 18% for basic rate taxpayers and 24% for higher rate taxpayers. Any changes to CGT made by the government will almost certainly increase the cost of disposing of investments, second residences, or company assets; thus, those wishing to dispose of assets should keep an eye out for Budget announcements.
Property and Council Tax Reform
Burnham has long advocated for reforms to the UK’s property taxes system. He has advocated for a proportional property tax, often known as Land Value Tax, as an alternative to Council Tax and Stamp Duty Land Tax. Under the new system, taxes would be based on actual property or land values rather than the old 1991 assessment, which is used to determine which band each family belongs to for Council Tax.
Proponents of the concept believe it will lead to a more just system. However, the effect will vary by location, with some households paying less and others paying more. Furthermore, Burnham has criticised the SDLT as a barrier to relocating and investing in property. He expressed a desire to use a more efficient system. The abolition of the SDLT will allow for a reduction in the initial cost of acquiring homes. However, the imposition of a recurring tax on properties may raise the yearly payments of certain long-term property owners. Despite the lack of formal regulation on the subject, property purchasers, investors, and homeowners must examine these considerations.
Income Tax, VAT and Personal Allowances
Burnham has stated that the Labour government will keep its commitment not to raise the basic rates of income tax, VAT, and employee National Insurance payments. Burnham has said unequivocally that these headline tax rates would not change following Keir Starmer’s resignation on June 22, 2026.
Since 2021, the personal income tax allowance has been unchanged and will not be increased until 2028. The personal allowance freeze will result in more people falling into higher tax rates as time and pay increase. Tax policy experts expect a reconsideration of the Income Tax personal allowance freeze under a Burnham-led administration. However, there has been no formal mention of such a review.
Wealth Taxes and Investment Relief
Burnham has suggested that he is prepared to shift part of the tax burden from employment to wealth. However, he has yet to provide a specific policy recommendation on this issue. Tax policy discussions have contemplated modifications to the handling of pension fund Inheritance Tax beginning in April 2027, as well as the imposition of additional taxes on financial wealth holdings other than ISAs and pensions.
Burnham has also backed a program of investing in smaller businesses, particularly those outside of London. This may be accomplished by extending existing tax benefits such as the Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS). The present schemes provide significant tax breaks on income and capital gains taxes for eligible investments. The expansion of such programs will provide new prospects for company finance and investment.
What This Means for You Right Now
Given the upcoming leadership transition to a new Prime Minister and the announcement of increased tax intentions in 2026, it is important to evaluate your tax situation. Even if most of these tax ideas have yet to be enacted, planning ahead of time will provide you sufficient time to prepare for changes.
The experts at Reflex Accounting help small business owners, contractors, company directors, landlords, investors, and others understand the implications of future tax changes on their finances. We give the finest tax counsel available, whether it is for capital gains tax, payroll planning, property tax, inheritance tax, or other issues.
Please email us at info@reflexaccounting.co.uk or call +44 121 262 1528.
