Latest news with #FamilyBusinessUK
Spectator
3 days ago
- Business
- Spectator
Rachel Reeves risks killing off the family business
Changes to how inheritance tax and trusts are treated for non-doms have already put the nation's finances on shakier ground – something I revealed in a cover story last month. Now, a new report suggests these anti-business Treasury policies may risk killing off Britain's family firms too. Fresh analysis by the CBI's economics consultancy, commissioned by Family Business UK, warns that these changes to inheritance tax could jeopardise more than 208,000 full-time jobs over the course of this Parliament. That's more than the entire construction workforce in London. The report says that as small firms retreat from long-term investment, the wider economic consequences could be severe. The government is planning to reform Agricultural Property Relief (APR) and Business Property Relief (BPR) – two long-standing mechanisms that can offer up to 100 per cent exemptions from inheritance tax on qualifying land and business assets.
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
27-05-2025
- Business
- Telegraph
Reeves's vindictive attacks on business will cost us all
Passions were running high at the Opposition Day debate in Parliament last week. 'This socialist Government does not want people to succeed,' said Andrew Griffith, the shadow trade and business secretary. 'There could be no better example of that than the vindictive family business and family farm death tax, which will carve up successful businesses as and when they are handed down to the next generation,' he added. With one of the 17 parliamentary days allocated to the party as the official opposition, the Conservatives elected to hold a debate on business and the economy, calling on the Government to urgently reverse measures such as the business property relief (BPR) reforms to support family businesses and other enterprises which 'take risks to create wealth and jobs that benefit people across the country'. BPR reforms have elicited strong emotions since they were announced by the Chancellor last year. Now family businesses have the data to support the claim that the policy is already having a chilling effect on the entire economy. Earlier this year, a report by Family Business UK, a not-for-profit organisation advocating for the industry, found that 23pc of family businesses and 17pc of family farms had already cut jobs or paused recruitment in response to the BPR and agricultural property relief (APR) reforms coming into effect next year. It predicted that the changes would result in more than 208,000 jobs being lost by the end of the current parliament, ultimately delivering a net loss of £1.9 billion to the Treasury by 2029. 'Our members tell us, and our sector research shows, that decisions are being taken now to cut jobs, reduce investment and sell assets, putting at risk the future of thousands of businesses,' said Fiona Graham, of Family Business UK. 'The changes to BPR and APR are having an immediate impact on family-owned enterprises, threatening not just their future but the livelihoods of working people and communities right across the country who depend on them,' she added. Playing fast and loose with jobs Georgiana Bristol, chief executive of the Jobs Foundation, told me the Government needed to act fast if the worst impact of the policy was to be mitigated. Speaking from her experience heading the charity, which promotes the role of businesses in creating jobs and sustaining communities, Ms Bristol expressed concern that decisions family firms were being forced to make could not easily be undone in four years' time, particularly if they involved, for example, selling a part of the business to insure it against future tax bills. In a crowded field of ideologically driven economic policies that have backfired on the Treasury, the BPR reforms stand out as particularly prejudiced. Campaigners claim no impact assessments were carried out, nor were any consultations held with the very diverse group of businesses affected by the policy – from family law practices to garden centres to petrol stations. For a Chancellor grappling with an astronomical welfare bill coupled with chronic joblessness, playing fast and loose with stable jobs which sustain local communities, by targeting an especially driven group who are proven job creators, does indeed seem 'vindictive'. 'Running or investing in a business at its core,' said Mr Griffith in the Commons last week, 'is a profound act of human courage – the triumph of optimism over inertia'. That is sadly not a quality that the Chancellor or the Treasury are prepared to countenance.
