England mayors to get share of income tax and business rates

Prime Minister Andy Burnham has announced a landmark plan to give mayors in England a direct share of income tax and business rates collected in their areas, marking what his government calls the biggest transfer of financial power away from Westminster in a generation. The policy, confirmed on July 30, 2026, is designed to fulfill Burnham's pledge to decentralize the British state and empower regional leaders.

Under the plan, mayors will be able to retain and spend a portion of locally generated taxes on regional priorities such as public transport, housing, and job creation. The government stated that the income tax rates paid by individuals will not change as a direct result of the reforms. To prevent widening inequalities, ministers will retain an equalization system to ensure areas that collect less tax continue to receive financial support.

The detailed policy framework is expected to be published in a white paper when Chancellor John Healey presents his first budget in the autumn of 2026. According to the government's announcement, the retention of business rates will begin in the spring of 2027, with income tax retention following in 2028. These funds will replace the...