Andy Burnham is Britain’s new Prime Minister – and workers across the country are asking the same urgent question: will the change at Number 10 mean a change to the Income Tax coming out of their pay?
What has happened?
Andy Burnham became Prime Minister on 20 July 2026, succeeding Sir Keir Starmer and beginning a new chapter for the Labour government.
A new Prime Minister does not automatically change the tax deducted from your salary. However, a change of leader can bring new priorities, a new Chancellor and, eventually, new decisions about tax thresholds, allowances and government spending.
Burnham’s arrival in Downing Street has therefore prompted some very personal questions:
What are taxpayers asking now?
- Will Andy Burnham put up Income Tax?
- Will I take home less money each month?
- Could I be pushed into a higher tax band?
- Will the Personal Allowance remain frozen?
- Could National Insurance rise instead?
- When will we know what his tax plans really are?
- Should I make any financial changes now?
The quick answer
Your Income Tax rate has not changed simply because Andy Burnham has become Prime Minister.
The existing rates and bands continue to apply. However, future decisions about thresholds, allowances and reliefs could still leave some people paying more tax – even without an increase in the headline rates.
Will Andy Burnham raise Income Tax?
There has been no immediate change to the main rates of Income Tax following Burnham’s appointment.
He has also indicated that his government will initially retain the previous administration’s broad commitments on taxation and public spending. That should not, however, be treated as a guarantee that every threshold, allowance and tax rule will remain untouched throughout his premiership.
The most important distinction is between:
- the rate of tax charged within each band; and
- the thresholds that determine when you begin paying each rate.
A government can collect more Income Tax without changing the 20%, 40% or 45% headline rates.
What are the current Income Tax rates?
For the 2026/27 tax year, the standard Personal Allowance and the main Income Tax bands for taxpayers in England, Wales and Northern Ireland are:
| Band | Income | Rate |
|---|---|---|
| Personal Allowance | Up to £12,570 | 0% |
| Basic rate | £12,571 to £50,270 | 20% |
| Higher rate | £50,271 to £125,140 | 40% |
| Additional rate | Over £125,140 | 45% |
Could you still pay more Income Tax?
Yes. The main reason is something known as fiscal drag.
Fiscal drag occurs when wages rise while tax thresholds stay fixed or rise more slowly. A pay rise may then push a larger proportion of your earnings into a taxable band – or move part of your income into a higher-rate band.
You may earn more on paper but lose a greater share of the increase to tax.
A simple example
Someone earning just below the higher-rate threshold could receive a pay rise that takes part of their earnings above it. The 40% rate has not increased, but that worker could still pay more tax because more of their income now falls within the higher-rate band.
“The question is not only whether Income Tax rates rise. It is whether thresholds and allowances keep pace with people’s earnings.”
Will your take-home pay change immediately?
Most employees should not see their Income Tax deduction change merely because the Prime Minister has changed.
The amount deducted through PAYE could still change for other reasons, including:
- receiving a pay rise or bonus;
- a change to your tax code;
- starting or ending taxable workplace benefits;
- having more than one job or pension;
- a change to your Personal Allowance; or
- new measures announced in a Budget or fiscal statement.
Check your next payslip
Look at your gross pay, tax code, taxable pay and Income Tax deduction. An unexpected change may be connected to your tax code or circumstances rather than the change of Prime Minister.
What about National Insurance?
Income Tax and National Insurance are separate deductions, even though both can reduce the amount that reaches your bank account.
A promise or decision concerning Income Tax does not automatically protect National Insurance rates or thresholds. Workers should therefore pay attention to both when Burnham’s government sets out its fiscal plans.
When will we know more?
The clearest answers are likely to arrive when the new Prime Minister and Chancellor publish detailed tax and spending plans.
Important announcements to watch include:
- the appointment and first statements of the Chancellor;
- the next Budget or fiscal statement;
- decisions about the Personal Allowance;
- changes to the basic- and higher-rate thresholds;
- reforms to tax reliefs or salary sacrifice;
- changes affecting self-employed workers; and
- any alteration to National Insurance.
Should you change your finances now?
It would generally be unwise to make a major financial decision solely because a new Prime Minister has taken office.
There may still be sensible housekeeping steps you can take:
- check that your tax code is correct;
- review your workplace pension contributions;
- keep records of allowable work and self-employment expenses;
- check whether you can claim Marriage Allowance or another relief; and
- wait for confirmed policy before making decisions based on possible tax changes.
What happens to your Income Tax under Andy Burnham?
The MoneyMagpie bottom line
Nothing has happened to your Income Tax simply because Andy Burnham has entered Number 10.
The current rates and thresholds remain in force. The bigger issue is what his government does next.
Even if the headline rates remain at 20%, 40% and 45%, frozen thresholds or changes to allowances could still increase the amount some people pay. The first detailed Budget or fiscal statement will be the key moment for taxpayers.
Frequently asked questions
Has Andy Burnham changed Income Tax?
No immediate change to the main Income Tax rates or bands occurred when Andy Burnham became Prime Minister. The existing rules continue to apply unless the government formally announces and implements a change.
Could I pay more tax without rates rising?
Yes. If wages increase while tax thresholds remain fixed, more of your income may become taxable or fall into a higher band. This is commonly described as fiscal drag.
Will my payslip change straight away?
Your tax deduction should not change solely because the Prime Minister has changed. It may change if your pay, benefits, tax code or personal circumstances change.
When could new tax plans be announced?
Detailed changes would normally be set out in a Budget, fiscal statement or other formal government announcement. Until then, speculation should not be treated as confirmed policy.
Are Income Tax bands the same in Scotland?
No. Scotland sets different Income Tax rates and bands for non-savings, non-dividend income. Scottish taxpayers should check the rates that apply specifically to them.
FURTHER READING:
Andy Burnham Becomes PM: What It Means for Your Investments
Information correct at the time of publication. Tax rules can change and individual circumstances differ. This article is general information and is not personal tax or financial advice.
