Shortly after becoming Prime Minister, Andy Burnham said his government might need to ask people to pay “a little more” in tax. It sounded like a passing remark. For our clients, it is worth reading a good deal more into it.
By Chris Davies – Partner
Burnham has set out ambitious plans for the UK, and ambition on that scale carries a price tag. The question every business owner, property investor and high net worth individual should be asking is straightforward. Who pays, and how?
Where the pressure is coming from
The continuing conflict in Ukraine keeps defence spending firmly on the agenda. John Healey, now Chancellor of the Exchequer, resigned as Defence Secretary under the previous administration because he believed the existing defence spending plans fell short. Now that he controls the Treasury, a significant increase in that budget looks likely, and it will need to be funded from somewhere.
At the same time, Labour’s manifesto promised no rises to income tax, VAT or National Insurance for working people. That promise still stands, on paper. In practice, the government has found other ways to raise revenue.
Two years of change
Since the last general election, we have already seen a steady stream of tax raising measures, including:
- Numerous allowances frozen
- Higher employers’ National Insurance
- Increases to Capital Gains Tax rates
- Higher dividend and savings income tax rates
- Increases to property income tax
- A reduced Business Asset Disposal Relief
- Pension funds brought within the scope of Inheritance Tax
- Restrictions to Agricultural Property Relief and Business Property Relief
- VAT introduced on private school fees
- A new mileage tax on electric vehicles
- Abolition of the Furnished Holiday Lettings regime
- The so called “Mansion House Tax”
And many more.
Where might the Chancellor look next?
If the pattern of the last two years is any guide, business owners, homeowners and property investors are likely to be the next targets. Commentators have floated the complete withdrawal of Business Asset Disposal Relief, further rises in Capital Gains Tax to bring it closer to income tax rates, higher dividend tax rates, and even another increase to employers’ National Insurance.
None of this is confirmed. All of it is plausible, and clients with significant assets are right to be watching developments closely.
What to do before Budget Day
The Autumn Budget is confirmed for Wednesday 28 October 2026. If you are considering selling a business, property or other significant assets, now is the time to speak to your professional advisors. Bringing a sale forward, where it makes commercial sense to do so, could mean securing today’s tax rates rather than whatever follows.
We will continue to monitor developments over the coming weeks and keep clients informed of anything that affects their position. If you would like to talk through how the Budget could affect you and your plans, please get in touch with our team.
