The UK government is considering a wealth tax to address rising borrowing costs and increased spending on defense and social care. Chancellor John Healey, appointed in July 2026, is evaluating these measures as he prepares for the October 28 budget.
Campaigners from Oxfam and Tax Justice UK propose a 2% annual levy on assets over £10 million. According to University of Warwick research, such a tax could generate approximately £24 billion per year, though this figure is viewed as an upper bound.
The Institute for Fiscal Studies (IFS) has highlighted significant valuation challenges for non-public assets like private businesses, art collections, and agricultural estates. The IFS also noted that liquidity issues could hinder the ability of wealthy individuals to pay the levy.
Prime Minister Andy Burnham has previously supported a surcharge on council tax for homes valued above £2 million, which is scheduled to take effect in 2028. He believes wealth is currently undertaxed compared to labor in the UK.
Alternative near-term measures may include reforms to inheritance tax, capital gains tax, or pension tax relief for high earners. These options are considered more politically feasible due to existing administrative infrastructure.
