What would greater fiscal devolution mean for businesses?
Burnham’s agenda centres on a new “No. 10 North” operation based in Manchester, intended to redistribute power and resources away from Whitehall. Bannister cautioned the practical tax consequences of devolving fiscal powers to English regions could create new complexities for businesses operating nationally.
“It’s about much more than the location of government departments. Greater fiscal powers for regions could mean different approaches to taxation, investment incentives and economic policy across England. That clearly creates opportunities for regions to compete and innovate, but at the same time risks adding complexity for businesses operating nationally if the framework is not carefully designed.”
Could stamp duty be replaced with a land value tax?
For mortgage brokers and advisers, the most consequential element is the suggestion individual wealth taxation is also under review. A land value tax (LVT) is an annual charge based on the assessed value of land or property, rather than a one-off cost paid on completion as with stamp duty. Bannister pointed to early signals Burnham is considering exactly this kind of overhaul of property and wealth taxes.
“When it comes to individuals Burnham appears to be leaning towards taxing wealth more heavily including aligning capital gains tax more closely with income tax, replacing council tax and stamp duty with a proportional property or land value tax, and potentially reforming inheritance tax. Whilst these ideas remain at an early stage, they do signal a willingness to revisit parts of the tax system that have remained largely unchanged for years, although we will definitely see some pushback from certain parts of the population.”
One model under discussion is the Fairer Share campaign’s proposal for a proportional property tax, which would apply an annual charge of 0.48% on a property’s assessed value in place of stamp duty and council tax. Nicholas Smith, head of tax at Duncan and Toplis, told The Independent the proposal carried real practical hurdles. “Regular, accurate property valuations across the entire UK are difficult to assess,” he said, adding that the regional impact would likely be skewed, with higher-value areas in the South East facing significantly larger bills than under the current council tax system.
