Wealth tax on UK’s super-rich could raise £10bn a year, Andy Burnham told
Andy Burnham has been urged by academics to introduce a wealth tax on Britain's super-rich households as part of his plans to make the tax system fairer and fund better public services. A study by economists Gabriel Zucman and Ben Tippet suggests a 2% minimum charge on households worth more than £100m could raise £10bn a year, affecting fewer than 1,000 of the UK's wealthiest families. The proposal comes as Burnham, the new prime minister, prepares to set out his tax and spending plans, having previously said he wants to make taxation fairer without demonising any particular group.
Under the plan, HMRC would calculate the total accumulated wealth of rich families, including property, businesses, pensions, art and land, to prevent avoidance through holding companies or trusts. A rule would also require wealthy families to keep paying the tax for at least ten years after leaving the UK, to stop them dodging it by emigrating. The academics argue the targeted nature of the tax means common criticisms of wealth taxes, such as valuation difficulties and impacts on entrepreneurs, would not apply, and they note that similar ideas are gaining traction internationally, including in New York under mayor Zohran Mamdani.
In short
- Academics urge Burnham to adopt a 2% wealth tax on £100m+ households
- Proposal could raise £10bn annually, affecting under 1,000 families
- Rule would stop wealthy people avoiding tax by leaving the UK
Steelman: both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
A wealth tax on the super-rich is a proportionate response to rising inequality that could generate substantial revenue for public services without affecting ordinary families. The proposal's narrow scope—affecting fewer than 1,000 households worth over £100m—and its carefully designed safeguards against avoidance through trusts and emigration rules address traditional concerns about wealth taxes. With similar policies finding support internationally, this represents a fair redistribution where those with the greatest accumulated wealth contribute appropriately to the public good.
The case against
Wealth taxes face serious practical obstacles that make them difficult to implement effectively. Valuing illiquid assets like private businesses and art creates expensive disputes with tax authorities, whilst the threat of capital flight means the tax may drive wealthy individuals and productive enterprises abroad, as occurred when France abandoned its wealth tax. The compliance costs and potential reduced incentives for wealth creation could ultimately damage economic growth and job creation, potentially collecting far less than projected whilst creating perverse incentives to liquidate assets or relocate.
Explained simply
A wealth tax is an annual charge on accumulated assets such as property, investments, art and land, rather than on income or profits. The proposal would affect only the very richest households in Britain, with fewer than 1,000 families potentially paying a 2% annual levy on assets above £100 million.
The idea is being considered as a way to raise significant government revenue and address concerns about fairness in the tax system, since wealth taxes specifically target accumulated riches rather than income from work or business. The proposed system includes measures to prevent tax avoidance, such as requiring authorities to assess total assets regardless of how they are held, and applying the tax even to people who have left the UK.
Wealth taxes have been attempted internationally with mixed results, with some countries finding them difficult to administer or seeing wealthy people relocate to other countries to avoid them. The debate continues over whether such taxes are practical and effective, or whether the practical challenges outweigh the potential revenue benefits.