Latest news with #CBIEconomics
Yahoo
3 days ago
- Business
- Yahoo
Labour tax raid on farmers to cost Treasury up to £2bn
Rachel Reeves's tax raid on farmers will cost the Treasury almost £2bn, analysis has found, despite Treasury claims that it could boost the public purse by as much as £1.8bn. Inheritance tax reforms due to come into force next April will cause family businesses to slash investment and jobs and lead to a slowdown in the economy, according to independent consultants at CBI Economics. Its estimates suggest that changes to business property relief (BPR) and Agricultural Property Relief (APR) will backfire and, instead of saving money, it will cost the Treasury £1.9bn by 2030. Under the changes, inherited farms worth more than £1m will be taxed at a rate of 20pc after having been shielded from the levies for decades – while a 20pc rate will also be charged on inherited business assets over £1m when someone dies. The Government has said it is expecting to raise £1.8bn from family-owned businesses and farms from the reforms by 2030. Analysis from the Office for Budget Responsibility last October said this estimate accounted for how business owners and farmers would respond to the policies, although admitted the costing had a 'high degree of uncertainty'. Family Business UK, the industry group which commissioned the research, said: 'Far from increasing tax receipts into the Treasury and stimulating the economic growth the Government is trying to deliver, the changes to BPR and APR in the October Budget achieve the opposite.' The organisation said the Government risked 'inadvertently undermining [its] mission of sustained economic growth, which we agree is an absolute necessity to deliver prosperity and improved living standards for working people'. The analysis found that more than 60pc of family businesses and farms were planning to reduce investment by over a fifth in light of the changes. Around a quarter have already cut staff. By the end of this parliament, more than 200,000 jobs are expected to be lost, the research showed. Areas including Yorkshire, the East of England and Northern Ireland are expected to be the hardest hit. It comes amid a growing backlash over the inheritance tax raid and calls for the reforms to be delayed. Charities have reported a surge in calls from distressed business-owners. In November, John Charlesworth, 78, took his own life after his family said he had been 'eaten away' by fear of the tax raid. Neil Davy, chief executive of Family Business UK, said the findings showed 'just how far-reaching, and immediate, the impact of these policy changes is'. He added: 'No industry, sector, region or parliamentary constituency will be immune... The Government must urgently reconsider these policy changes.' Tom Bradshaw, president of the National Farmers Union, said: 'This report must serve as a wake-up call to Treasury, or we face major cuts to investment and significant job losses.' Mo Metcalf-Fisher of the Countryside Alliance said: 'It would be an act of foolishness to ignore the very real and irreversible damage these changes pose to the stability of the agricultural sector.' Meanwhile, Andrew Griffith, the shadow business secretary, said: 'Labour plan to steal the futures of a generation of entrepreneurs on the back of some hooky treasury maths and a blatant breach of election promises. 'The Conservative position is crystal clear. A family business death tax has no place in a society where we celebrate risk takers and wealth creators. No if's or buts. Our first Conservative budget will reverse this damaging measure.' Separate data published on Monday showed the impact Labour's tax policies are having on the economy. Estimates compiled by former Treasury economist Chris Walker found at least 10pc of non-doms have already left the UK in the wake of Labour's crackdown. If more than 25pc of non-doms leave the UK, forecasts suggest the Treasury would start losing revenue. Analysts have suggested the crackdown on non-doms could cost the UK more than £10bn a year in lost economic growth. A Treasury spokesman said: 'Our reforms to Agricultural and Business Property Reliefs will mean three quarters of estates will continue to pay no inheritance tax at all, while the remaining quarter will pay half the inheritance tax that most estates pay, and payments can be spread over 10 years, interest-free. 'This is a fair and balanced approach which helps fix the public services we all rely on' Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
Telegraph
3 days ago
- Business
- Telegraph
Labour tax raid on farmers to cost Treasury up to £2bn
Rachel Reeves's tax raid on farmers will cost the Treasury almost £2bn, analysis has found, despite Treasury claims that it could boost the public purse by as much as £1.8bn. Inheritance tax reforms due to come into force next April will cause family businesses to slash investment and jobs and lead to a slowdown in the economy, according to independent consultants at CBI Economics. Its estimates suggest that changes to business property relief (BPR) and Agricultural Property Relief (APR) will backfire and, instead of saving money, it will cost the Treasury £1.9bn by 2030. Under the changes, inherited farms worth more than £1m will be taxed at a rate of 20pc after having been shielded from the levies for decades – while a 20pc rate will also be charged on inherited business assets over £1m when someone dies. The Government has said it is expecting to raise £1.8bn from family-owned businesses and farms from the reforms by 2030. Analysis from the Office for Budget Responsibility last October said this estimate accounted for how business owners and farmers would respond to the policies, although admitted the costing had a 'high degree of uncertainty'. Family Business UK, the industry group which commissioned the research, said: 'Far from increasing tax receipts into the Treasury and stimulating the economic growth the Government is trying to deliver, the changes to BPR and APR in the October Budget achieve the opposite.' The organisation said the Government risked 'inadvertently undermining [its] mission of sustained economic growth, which we agree is an absolute necessity to deliver prosperity and improved living standards for working people'. The analysis found that more than 60pc of family businesses and farms were planning to reduce investment by over a fifth in light of the changes. Around a quarter have already cut staff. By the end of this parliament, more than 200,000 jobs are expected to be lost, the research showed. Areas including Yorkshire, the East of England and Northern Ireland are expected to be the hardest hit. Report must 'serve as a wake-up call to Treasury' It comes amid a growing backlash over the inheritance tax raid and calls for the reforms to be delayed. Charities have reported a surge in calls from distressed business-owners. In November, John Charlesworth, 78, took his own life after his family said he had been 'eaten away' by fear of the tax raid. Neil Davy, chief executive of Family Business UK, said the findings showed 'just how far-reaching, and immediate, the impact of these policy changes is'. He added: 'No industry, sector, region or parliamentary constituency will be immune... The Government must urgently reconsider these policy changes.' Tom Bradshaw, president of the National Farmers Union, said: 'This report must serve as a wake-up call to Treasury, or we face major cuts to investment and significant job losses.' Mo Metcalf-Fisher of the Countryside Alliance said: 'It would be an act of foolishness to ignore the very real and irreversible damage these changes pose to the stability of the agricultural sector.' Meanwhile, Andrew Griffith, the shadow business secretary, said: 'Labour plan to steal the futures of a generation of entrepreneurs on the back of some hooky treasury maths and a blatant breach of election promises. 'The Conservative position is crystal clear. A family business death tax has no place in a society where we celebrate risk takers and wealth creators. No if's or buts. Our first Conservative budget will reverse this damaging measure.' Separate data published on Monday showed the impact Labour's tax policies are having on the economy. Estimates compiled by former Treasury economist Chris Walker found at least 10pc of non-doms have already left the UK in the wake of Labour's crackdown. If more than 25pc of non-doms leave the UK, forecasts suggest the Treasury would start losing revenue. Analysts have suggested the crackdown on non-doms could cost the UK more than £10bn a year in lost economic growth. A Treasury spokesman said: 'Our reforms to Agricultural and Business Property Reliefs will mean three quarters of estates will continue to pay no inheritance tax at all, while the remaining quarter will pay half the inheritance tax that most estates pay, and payments can be spread over 10 years, interest-free. 'This is a fair and balanced approach which helps fix the public services we all rely on'
Yahoo
3 days ago
- Business
- Yahoo
Labour tax raid on farmers to cost Treasury up to £2bn
Rachel Reeves's tax raid on farmers will cost the Treasury almost £2bn, analysis has found, despite Treasury claims that it could boost the public purse by as much as £1.8bn. Inheritance tax reforms due to come into force next April will cause family businesses to slash investment and jobs and lead to a slowdown in the economy, according to independent consultants at CBI Economics. Its estimates suggest that changes to business property relief (BPR) and Agricultural Property Relief (APR) will backfire and, instead of saving money, it will cost the Treasury £1.9bn by 2030. Under the changes, inherited farms worth more than £1m will be taxed at a rate of 20pc after having been shielded from the levies for decades – while a 20pc rate will also be charged on inherited business assets over £1m when someone dies. The Government has said it is expecting to raise £1.8bn from family-owned businesses and farms from the reforms by 2030. Analysis from the Office for Budget Responsibility last October said this estimate accounted for how business owners and farmers would respond to the policies, although admitted the costing had a 'high degree of uncertainty'. Family Business UK, the industry group which commissioned the research, said: 'Far from increasing tax receipts into the Treasury and stimulating the economic growth the Government is trying to deliver, the changes to BPR and APR in the October Budget achieve the opposite.' The organisation said the Government risked 'inadvertently undermining [its] mission of sustained economic growth, which we agree is an absolute necessity to deliver prosperity and improved living standards for working people'. The analysis found that more than 60pc of family businesses and farms were planning to reduce investment by over a fifth in light of the changes. Around a quarter have already cut staff. By the end of this parliament, more than 200,000 jobs are expected to be lost, the research showed. Areas including Yorkshire, the East of England and Northern Ireland are expected to be the hardest hit. It comes amid a growing backlash over the inheritance tax raid and calls for the reforms to be delayed. Charities have reported a surge in calls from distressed business-owners. In November, John Charlesworth, 78, took his own life after his family said he had been 'eaten away' by fear of the tax raid. Neil Davy, chief executive of Family Business UK, said the findings showed 'just how far-reaching, and immediate, the impact of these policy changes is'. He added: 'No industry, sector, region or parliamentary constituency will be immune... The Government must urgently reconsider these policy changes.' Tom Bradshaw, president of the National Farmers Union, said: 'This report must serve as a wake-up call to Treasury, or we face major cuts to investment and significant job losses.' Mo Metcalf-Fisher of the Countryside Alliance said: 'It would be an act of foolishness to ignore the very real and irreversible damage these changes pose to the stability of the agricultural sector.' Meanwhile, Andrew Griffith, the shadow business secretary, said: 'Labour plan to steal the futures of a generation of entrepreneurs on the back of some hooky treasury maths and a blatant breach of election promises. 'The Conservative position is crystal clear. A family business death tax has no place in a society where we celebrate risk takers and wealth creators. No if's or buts. Our first Conservative budget will reverse this damaging measure.' Separate data published on Monday showed the impact Labour's tax policies are having on the economy. Estimates compiled by former Treasury economist Chris Walker found at least 10pc of non-doms have already left the UK in the wake of Labour's crackdown. If more than 25pc of non-doms leave the UK, forecasts suggest the Treasury would start losing revenue. Analysts have suggested the crackdown on non-doms could cost the UK more than £10bn a year in lost economic growth. A Treasury spokesman said: 'Our reforms to Agricultural and Business Property Reliefs will mean three quarters of estates will continue to pay no inheritance tax at all, while the remaining quarter will pay half the inheritance tax that most estates pay, and payments can be spread over 10 years, interest-free. 'This is a fair and balanced approach which helps fix the public services we all rely on'
Telegraph
24-03-2025
- Business
- Telegraph
Half of family-run businesses cancel investments as tax grab looms
More than half of family-run businesses and farms have paused or ditched investments as they scramble to cut costs ahead of Rachel Reeves's inheritance tax (IHT) raid, data shows. More than 55pc of businesses surveyed by Family Business UK and CBI Economics said they had cancelled investments or put them on hold in the wake of the Chancellor's October Budget, in which she capped the longstanding tax relief on properties used for business and agriculture at £1m worth of assets. The move was designed to clamp down on wealthy landowners using property to avoid tax, but has proved controversial among farmers and business owners, who say they could be forced to sell up to be able to pay the levy. According to the survey, 12pc of respondents plan to sell their business to cover the tax increase. Lance Forman, who runs London's oldest salmon smokehouse H Forman & Son and is a former Brexit Party MEP, said: 'People don't run family businesses for a tax loophole – it's bloody hard work. 'Much better to keep these businesses going, so they employ people, so the Government receives PAYE (pay as you earn) on the employees' salaries, income tax on dividends, capital gains tax if the business is ever sold at some stage. 'To tax a business just because the owner happens to have died, it shows a complete lack of understanding of the decisions that people make in starting up and running businesses.' Family Business UK said the tax rises could result in more than 208,000 jobs being cut and a net fiscal loss of £1.9bn by the end of this Parliament. It comes after Mel Stride, the shadow chancellor, told The Telegraph that the cut to business property relief (BPR) would lead to an increase in UK companies being sold to foreign buyers, as he argued Labour had 'lost sight' of how to support entrepreneurs. Nearly a quarter of companies surveyed said they have paused recruitment or had made cut jobs since the Budget. Companies face an extra hit from next month when employers' National Insurance (NI) contributions rise. A further 23pc said they planned to cut jobs or pause recruitment before the IHT changes kick in next year. Farmers argue they will be unfairly penalised by the tax changes because many of them are asset rich but cash poor after facing years of soaring costs and squeezed margins. Nearly half of farmers surveyed said they had cancelled or paused investments since the Budget. Some business owners have also turned to expensive life insurance policies. Almost a quarter (24pc) of those surveyed said they may take one out before 2026. Steve Perez, the owner of a string of hotels and the drinks company Global Brands, revealed in February he was taking out a £6m policy so his family would not be forced to break up his business empire when he dies. Family Business UK added that around one in five businesses it surveyed had reduced charitable donations or community activities since the Budget. Neil Davy, of Family Business UK, said: 'Across every sector, decisions are now being taken to cut jobs, reduce investment and sell assets threatening the future of thousands of businesses farms and the sustainability and security of UK farming and food production. 'Ultimately, it will be the working people, and communities right across the country, who depend on family-owned businesses and farms who'll pay the price.' A government spokesman said: 'While we do not recognise this analysis, we remain determined to make the tax system fairer. 'The vast majority of estates will not have to pay any inheritance tax at all under our changes, and we are providing the stability businesses so desperately need by capping corporation tax for the duration of parliament and locking in permanent full expensing to boost investment.'
Yahoo
24-02-2025
- Business
- Yahoo
Net zero economy in North East worth £2.3 billion with 10,000 jobs expected
A national report shows the North East is not being 'left behind' when it comes to the economic opportunities presented by the nation's drive towards renewable energy and sustainability. The North East's net zero economy is now worth £2.3 billion, according to the national CBI report released today (Monday, February 24). The CBI Economics report, also revealed that the North East's net zero economy grew by 10 per cent in the past year, matching the national average growth. And the sector employs 31,800 full-time workers, representing 2.8 per cent of the North East workforce. More than 10,000 jobs are expected to be created from net zero projects in Tyneside, Teesside and Wearside, but small businesses in the North East are also a major part of new jobs and developments. The North East is ahead of some regions but still behind the South East, where most money has so far been invested. The report was commissioned by the Energy and Climate Intelligence Unit (ECIU) with analysis provided by CBI Economics and The Data City. On Tyneside, a planned £1 billion hub for Nissan's EV26Zero will integrate electric vehicle (EV) production and battery manufacturing, entirely powered by wind and solar farms. The initiative is expected to create about 6,200 jobs and includes a £450 million investment in the UK's first gigafactory for next-generation EV batteries. Another project is Net Zero Teesside Power which aims to create the world's first commercial-scale gas-fired power station with carbon capture and storage technology. The project will capture up to 2 million tonnes of CO2 annually and generate up to 742 megawatts of low-carbon electricity - enough to power over 1 million homes. This will also create 3,000 production jobs and 1,000 operational jobs, contributing £3.5 billion to the UK economy by 2050. These net zero jobs have high productivity, with each full-time role generating £105,500 in economic value, which is 38 per cent above the UK average. This translates into higher wages, with employees in net zero businesses earning an average of £43,076 per year. Guy Bashford from Business Durham said: 'We understand that the green economy is one of the key drivers of growth in the County Durham economy. Business Durham's Gary Bashford said the green economy is a key driver of growth in the County Durham economy (Image: CBI) 'I think targets help us - Durham County Council aims to reach net zero by 2045, and it's something we're working hard to ensure, rather than just hoping we'll make. 'Similarly, Northern Powergrid say they must more than triple the energy they supply if they are to make 2035 targets - that's only 10 years away. 'We have a strategy to develop it further because we know it has a whole host of advantages for us - things like new, well-paid jobs and more sustainable communities living in an improved environment while new skills are developed.' Today's report came as no surprise to Neil Spann, the CEO of Power Roll, a revolutionary solar company between Seaham and Murton, in County Durham. He said: "The news doesn't surprise me, probably because at Power Roll we are so involved in the clean-tech sector. 'When you look at what the push for the UK is, in terms of its industrial strategy, clean energy is part of that strategy; it's one of the four main elements. "So I think the growth is there, and there is a lot more to come in all sectors, particularly in renewables and the integration of renewables as the UK looks to break its reliance on the supply chain from China.' Peter Chalkley, director of the national Energy and Climate Intelligence Unit, said: 'The Climate Change Act and the UK's resulting relative policy stability have been a foundation for this sustained net zero growth, but it cannot be taken for granted and political signals matter for investors. Recommended reading: Darlington's Affleck and Moffat set to celebrate 100 years Major letting secured for new industrial unit on Team Valley Newton Aycliffe community project benefits from Banks grant 'Reaching net zero emissions means we stop adding more pollution to the atmosphere which is the only way we can stop climate change worsening and stop the extremes driving floods and heatwaves which increasingly threaten our economies.' Other local authorities highlighted by the report as qualifying as net zero 'hotspots' in the region include County Durham, Newcastle-upon-Tyne, Hartlepool, Middlesbrough, Redcar and Cleveland, Stockon-on-Tees, Northumberland, North and South Tyneside, Sunderland and Gateshead. This may correlate with Office for National Statistics (ONS) data that shows a 6.4 per cent increase from April 2023 to April 2024 in weekly earnings for full-time employees in the North East.
