Andy Burnham, the incoming prime minister, has refused to rule out introducing a wealth tax, saying his government “might be having to ask for a little more” from the wealthiest to balance the books. The comment has reignited a long-running debate about whether the UK should tax assets above a certain threshold, and what that would mean for the economy and for ordinary households.
A wealth tax is an annual levy on a person’s net assets – including property, shares, savings and other valuable possessions – above a set threshold. It is different from taxes on income (like income tax) or spending (like VAT). No broad wealth tax currently exists in the UK, though the government does collect money through inheritance tax, stamp duty and capital gains tax, which target specific types of wealth or transactions.
“Explains the proposed wealth tax in the UK, including Andy Burnham's stance and key proposals.”
Calls for a wealth tax have grown since Labour’s 2024 general election manifesto, in which the party committed not to raise income tax, VAT or national insurance. With those options off the table, some Labour MPs on the left, economists and campaigners have argued that the only way to raise significant new revenue is to tax wealth directly. One proposal, backed by Oxfam and Tax Justice UK, is a 2% levy on all assets over £10m. The Green Party of England and Wales supports a similar policy: 1% annually on assets above £10m and 2% on assets above £1bn.
Burnham has so far stuck to the manifesto pledges on income tax, VAT and national insurance. But in a recent interview with Gary Lineker, he said he was “not going to rule things out right now” and that decisions would be “difficult”. He has also hinted at other tax changes, such as increasing business rates on large warehouses to fund cuts for pubs and high-street shops – a policy sometimes called an “Amazon tax”. His choice of chancellor, expected to be Home Secretary Shabana Mahmood, may also influence how quickly any wealth tax is brought forward.
Q: Will a wealth tax affect most people in the UK? No. The main proposals target only the very wealthiest. For example, the Oxfam-backed plan would only apply to individuals with assets over £10m – that is around the top 1% of earners. Someone with assets below that threshold would not pay the levy.
Q: How much money could a wealth tax raise? The sources do not give a specific figure for the UK, but similar proposals in other countries have raised billions. The Green Party’s 1% tax on assets above £10m and 2% on assets above £1bn has been estimated by supporters to generate significant revenue, though independent analysis varies.
Q: Why is Andy Burnham considering a wealth tax now? Burnham has limited options to raise revenue because of Labour’s 2024 manifesto promises not to increase income tax, VAT or national insurance. At the same time, he has said the public finances are in a difficult state. A wealth tax is seen by some as a way to raise money from those with the greatest ability to pay, without breaking those manifesto pledges.
What happens next will depend on Burnham’s first steps as prime minister. He will take office on Monday and is expected to announce his cabinet, including the chancellor. A formal review of the public finances is likely, and any decision on a wealth tax would come after that. The political reaction has been predictably divided: Conservative leader Kemi Badenoch accused Burnham of “talking about raising your taxes again”, while Reform UK’s Robert Jenrick said he should rule out the ten taxes he has previously supported. For now, the idea remains a proposal – but one that the new prime minister has firmly kept on the table.
