I'm an expert - this is how Andy Burnham can tax UK billionaires without triggering exodus

An expert has called on Andy Burnham to implement a tax that would see Britain's top earners charged 2% of their net wealth without the option of fleeing the country. The new Prime Minister has declined to rule out introducing a wealth tax and suggested the Government "might have to be asking for a little more" at some point to balance Britain's books.

Dr Ben Tippet, lecturer in economics and wealth inequality at King's College London, said Mr Burnham should tax anyone with net assets of more than £100million at a minimum of 2%, which he said could generate around £10billion a year. The levy would have to include all assets with no exemptions to prevent tax dodging and be introduced alongside a 10-year "tail period", ensuring millionaires who move abroad still have to pay, he said.

"What Andy Burnham needs to tackle is the problem of billionaires paying a lower effective tax rate than the rest of us, which happens because the system is designed to tax income instead of unrealised capital gains," Dr Tippet told the Express.

"An effective wealth tax would target those millionaires who have seen their wealth increase year on year, and be based on all their assets, including business assets, property, even things like pensions."

The 10-year window during which billionaires would still have to pay tax even if they gave up British residency status would discourage fleeing and ensure that money generated in the UK is funnelled back into its economy, he added.

A similar system is already in place for inheritance tax, with taxpayers continuing to be exposed to the levy on their worldwide assets if they have lived in the UK for 10 of the previous 20 tax years.

"It's only fair that if you make your money in the UK, you should be liable for tax for a period of time, even if you give up your residency status," Dr Tippet said.

"This could produce £10billion a year in extra revenue, which is a third of the currently projected budget deficit for the UK economy," he added.

"That's seven times the cuts the last Government made to the winter fuel allowance, which massively tarnished their reputation. And this is, by and large, a deeply popular tax across the general population."

Dr Tippet added that Mr Burnham should consider a wealth tax not only to boost the UK economy but to tackle the recent "explosion" of the super rich relative to GDP.

"In the 1980s, the Queen was the richest person the list, and their cumulative wealth was about 5% of GDP," he said. "Today, it's more than tripled to over 16% of GDP. The wealth of this tiny group of people is more than 16% of all the goods and services we produce in this economy as a whole each year.

"This will continue to rise as a long-term trend over time if we don't change the tax system and how it's causing wealth concentration."

It comes after millionaires, including Gary Lineker, called on Mr Burnham, who took office last week, to introduce a higher tax on their wealth, with the funds generated used to reduce inequality, support public infrastructure and back small businesses.

Other experts have advocated for property tax reform, such as a land tax, which would be an annual levy on the value of the land itself, not just the property that is built upon it.

Dr Miriam Mara, associate professor of finance at Henley Business School, said: "Land and real estate are visible, difficult to hide offshore and already recorded in public systems. Property taxes must be designed more carefully to avoid harming cash-poor households."