The impact of another new government
23 July 2026
Need to Know:
Tax changes are possible, but nothing is confirmed.
Areas under speculation include tax allowances, business taxes and wealth taxation.
Avoid making decisions based on rumours; the Autumn Budget will offer more clarity.
With Andy Burnham becoming the UK's sixth Prime Minister in a decade, it's no surprise there is plenty of speculation about what the new government could mean for the UK's tax system.
While nothing has been confirmed, the government's challenging financial position means tax changes are likely to feature in the Autumn Budget.
What might change?
Personal Allowance
There has been speculation that the freeze on personal tax allowances could be reviewed, although Mr Burnham has recently suggested this would be difficult given current state of the UK’s finances.
Employer National Insurance
The Prime Minister has hinted that the increase in employer National Insurance could be reconsidered to encourage business growth, but no announcements have been made yet.
Business rates
The government has also suggested reducing business rates by 20% for parts of the hospitality, retail and leisure sectors to help high streets and support growth.
How could this be funded?
To pay for any tax cuts or increased spending, attention has turned to a number of possible tax changes.
Wealth tax – Mr Burnham has not ruled one out, although no details have been announced yet.
Capital Gains Tax – There is speculation that CGT rates could move closer to income tax rates, although this also has not been confirmed.
Property taxes – Existing plans for a surcharge on high-value homes remain, while wider reforms to council tax and stamp duty have also been suggested.
Inheritance Tax – There has been discussion about replacing Inheritance Tax with a broader social care levy, but there have been no recent commitments.
The Bottom Line
The new Prime Minister and Chancellor have made clear that their priorities are fiscal discipline, economic growth and making life more affordable. That suggests any tax cuts or spending commitments will need to be carefully funded, so further tax changes remain possible.
For now, it's best not to make financial decisions based on speculation. The Autumn Budget should provide greater certainty, and there will be time to plan before any changes take effect. If you have any concerns, speak to your Adviser.
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Tax Treatment
Tax Treatment
The tax treatment depends on the individual circumstances of each client and may be subject to change in the future.
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