Latest news with #MatthewMills
Telegraph
13 hours ago
- Business
- Telegraph
‘Family businesses are the bedrock of Britain. Attacking us is mind-blowingly stupid'
Are you making changes to your family business due to the new inheritance tax rules? Get in touch at money@ Matthew Mills, a former commodities trader, took a 50pc pay cut when he decided to join his family business in 2019. 'This was not the easy or lucrative option,' he says. 'I left a successful career because I wanted to ensure the future of the family business.' His parents set up Masteroast in 1981, which is now one of the biggest coffee roasting companies in the UK – one in 10 cups of coffee sold on the high street has been through their roasting process. 'My family reinvested every pound they could back into the business for over 40 years,' he says. Mills is now one of thousands at the helm of a mid-to-large-sized family firm worrying about their future. In her October Budget, Chancellor Rachel Reeves announced that, from April 2026, a £1m limit would apply to those claiming agricultural property relief (APR) and business property relief (BPR). In short, from next year, anyone inheriting significant land or commercial buildings is in line for a vast tax bill. This was a massive departure from the rules introduced in 1976 by a previous Labour government. 'The reliefs were an acknowledgement that farms and business assets are often illiquid and so should not be taxed like cash, because it benefits the country for them to continue,' says Hudda Morgan, of law firm Spencer West. 'These changes strike at the heart of multi-generational business planning.' Capping the relief means family businesses face a fundamental rethink, warns Mills. 'In order to cover inheritance tax, we will have to pull cash out of the business, reducing working capital and investment – and potential growth over the long term.' 'Corporates don't have to worry about a generational tax' 'Apparently, I'm one of the bad guys now,' says Charles Ellis, the fourth generation of Ellises to run the eponymous haulage firm, which recently celebrated its 90th anniversary. 'We recycle all our profits back into the business so there's just no cash to pay this kind of tax bill.' CS Ellis employs 270 people in Rutland in the East Midlands, and is one of the largest employers in the area. Ellis believes that family businesses have been unfairly targeted. 'Other business models don't have this tax to think about. The Government is making this model less competitive,' he says. 'Foreign-owned corporates don't have to worry about a generational tax.' Family businesses represent 90pc of UK private businesses, according to industry body Family Business UK (FBUK), employing 13.9 million people and generating a combined turnover of £1.7 trillion. Some 24,000 firms have more than 50 employees, according to the Family Business Research Foundation, and are likely to be affected by the changes. Family Business Community, another industry body, puts the figure closer to 40,000. 'People just don't really understand the nature and extent of family ownership,' says Martin Greig of FBUK. 'Owners make huge personal sacrifices to keep their name above the door. They don't take enormous salaries, preferring to invest in the business long term.' By capping BPR, Greig believes the Government has made a miscalculation. The Office for Budget Responsibility estimated that the changes to BPR and APR would only raise £1.7bn over a four-year period, a drop in the ocean of fiscal spending. However, the policy also has a 'high' uncertainty rating from the Office for Budget Responsibility, so may make far less. The changes are already having a huge effect. Of the 4,200 family firms surveyed by CBI Economics and FBUK, 55pc had already paused or cancelled investments, 23pc had reduced headcount and 15pc had reduced or cancelled their charitable contributions. More than one in 10 (13pc) said they now plan to sell off the company in the future. Some 70pc will reduce investment going forward and 22pc intend to downsize, intentionally reducing the value of their company. 'I'm shocked by the naïveté and stupidity of this approach' 'We haven't decided what we'll do yet. My parents are in their 70s now so we are very exposed,' says Mills. 'Their shares were due to move into a trust upon death in order to protect the long-term future of the business, but we don't yet know how trusts will be treated under the new rules. Do they need to leave the country to save the business? We are wasting time and money on figuring out a way through.' Sue Howorth, of The Family Business Community, says: 'There's a lot of uncertainty. Normally, professional advisers are up to speed, but even they haven't had clear direction from the Government. 'Many family businesses don't yet realise how much this could impact them. They've had their hands full with things like National Insurance changes and the knock-on effects of [changes to] international tariffs. We're doing what we can to help people understand what's coming and how to prepare.' According to its latest filing, Masteroast turned over £30m in 2023. Just 10pc of profit after tax was taken as dividends, less than £50,000 per director. Masteroast already pays corporation tax – in 2023, this was £94,000 – as well as VAT and employers' National Insurance. 'We already pay substantial taxes and support 150 livelihoods, but now we as a family are being taxed twice,' says Mills. 'The whole family business model is being punished. I'm shocked by the naivete and stupidity of this approach.' 'We survived Brexit, then Covid, then Ukraine. Then this happened' CS Ellis' neighbour, the injection-moulding firm Rutland Plastics, has also been affected by the changes. It has been in Caroline Johnston and Steve Ayre's family since 1956. The siblings have had successful careers outside and are the third generation to run the business. Ayre, who used to work in IT, is the managing director, and former Royal Mail marketeer Johnston heads up marketing. 'When the Budget was announced, we were already suffering,' she says. 'Our electricity bills had gone from £300,000 in 2019 to £1m last year. We'd just survived Brexit, then Covid, then Ukraine. And then this happened.' Johnston, 47, and Ayre, 50, have now started passing shares to the next generation to try and mitigate the impact of the changes – Ayre has two children and Johnston has three. 'As soon as each one turns 18, we'll pass over some shares to reduce the amount held by one individual,' says Ayre. 'Hopefully nothing happens to us over the next seven years,' says Johnston. 'We have taken out an insurance policy, just in case.' No inheritance tax is due on gifted shares provided you live for seven years after giving them. A 'gift inter vivos' insurance policy can protect family members from the potential inheritance tax liability on gifted assets, including shares, if the donor dies within seven years. For people in their 30s, premiums can be as low as 0.5pc, but a policy holder in their eighties could pay around 5.7pc a year. FBUK found that, like Rutland Plastics, a quarter of all family businesses intend to take out similar policies, in an unexpected boon for the insurance sector. 'We are okay because we are relatively young but if you are older, the premiums are cripplingly high,' says Johnston. 'If you don't have anyone to pass the shares to, you just have to start selling bits off.' The FBUK analysis found that the changes would reduce family businesses' economic output by £13.4bn because of reduced investment, flat revenues and stagnating job creation. 'We are launching a related new company this year and should have been up and running two months ago,' says Mills. 'But this has been a major distraction, delaying the creation of 15 new jobs.' FBUK found that an estimated 180,000 jobs would be lost by 2030 as a direct result of the BPR changes. Instead of making £1.7bn, it reckons the Government will actually be £1.9bn out of pocket because of the reduced tax take from these businesses, which currently stands at more than £200bn a year. An HM 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.' None of these business owners knew the value of their business before the changes. 'We have never cared about that, just about whether we have enough to keep paying wages and investing for the future,' says Johnston. Even the concept of a set 'value' is ludicrous, adds Mills. 'The Government is coming after the value locked inside businesses like mine, but valuation is based on willing sellers and willing buyers. Even if they eventually come up with a way to work it out, it will never be right.' Both Mills and Johnston are in manufacturing, where 'margins are already paper thin', says Johnston. She believes the changes were made to clobber wealthy family business owners like Sir James Dyson. 'Well, I'm not James Dyson,' she says. 'Most of us aren't.' The vultures are already circling By targeting family businesses, the Government is also damaging local communities, says Mills. 'We live and work here in the Peterborough area and care about the local community. If businesses like ours are sold off to big faceless corporations, that connection will be lost. We employ more than 150 people here – some have been with us for 25 years. Generations of families have worked with us and we really invest in our people.' Even farmers may be better off than some family business owners, adds Johnston. 'Farmers with a spouse, who live on the farm, get a combined £3m allowance,' says Johnston. 'But I'm not married to my brother and we don't live in the factory so there are no allowances to add up.' With many family firms scrambling to find a solution, the vultures are already circling. 'We have always had people wanting to buy the business but it's increasing now,' says Johnston. Morgan warns that the Government is already trying to close any tax loopholes: 'Transitional provisions came in from October 2024 to prevent the avoidance of the new tax rules through early transfers,' she says. These provisions prevent family businesses from splitting business property assets between separate trusts to bring the value of each trust below £1m to qualify for the 100pc relief. The Government will instead split the £1m relief across all the trusts created by that business to prevent inheritance tax avoidance. The same rules prevent business property being transferred to a spouse or civil partner. Morgan adds: 'And paying dividends to fund the tax could create a second layer of taxation at rates of up to 39.3pc.' According to Mills, the Government has woefully underestimated the contribution of businesses like his to the UK. 'These are sustainable businesses that continue to invest over the long term. We don't asset strip or react to 'boom' and 'bust' cycles, our long-term view spans generations, not years.' He adds: 'We are the cornerstone of the British economy. To attack the bedrock of the UK is mind-blowingly stupid.'
Int'l Business Times
2 days ago
- Business
- Int'l Business Times
Med-X: Pioneering Sustainable Pest Control on a Global Scale
A revolutionary shift in pest control is occurring, and it's being facilitated by the use of plant-based solutions. With an eye toward sustainable living and healthier choices, Matthew Mills, CEO and founder of Med-X, Inc., is leading the way for change in a modern world with the use of his Nature-Cide product line. The Genesis of Green Innovation An experienced entrepreneur, Mills is challenging the status quo, demonstrating that effective pest management can be achieved without compromising environmental sustainability. What began as a plan to address domestic needs as a local pest control service in Los Angeles California in the United States, has rapidly evolved into a global movement, inspiring widespread adoption of eco-conscious practices, which launched the brand Nature-Cide. "Everyone is our audience, as everyone wants to lead a healthier life," Mills explains. A Response to a Changing World Driven by an increasing demand for safer alternatives, Mills has used his company development experience to gather a team to create and advance the Nature-Cide brand of professional strength products, which aims to replace harmful chemical pesticides in both residential and commercial settings. Nature-Cide has rapidly achieved global recognition as a leading industrial-strength, natural pest control solution, emerging at a critical time when public skepticism towards conventional chemical products is on the rise. This sentiment was significantly amplified by the COVID-19 pandemic era, which heightened awareness of potential health and environmental hazards. This timing was pivotal, allowing Med-X to position itself as a trusted alternative amidst rapidly growing concerns. The Architect of Innovation Matthew Mills positioned a team with a wealth of experience to Med-X. Notably, his past accomplishments include spearheading the growth of a dot-com company to a value of $600 million while also being instrumental in its NASDAQ listing. Now, he is channeling his experience into propelling Med-X to new heights, including a newly launched $10 million Regulation A+ public offering supported by a substantial group of investors from around the world. Beyond "Greenwashing" Nature-Cide stands apart from some of the competitors who engage in "greenwashing," a type of deceitful marketing that aims to persuade the public that an organization's products or policies are environmentally friendly, when in fact they are not. The Nature-Cide brand delivers true professional-grade, plant-based alternatives that are trusted by industry applicators. And its transparency has been important in establishing Nature-Cide's credibility and driving its global acceptance. Med-X Inc. A Shift toward Conscious Living Med-X has ambitious plans for strategic expansion, which include the acquisition of complementary eco-focused businesses. This approach aims to solidify its position as a leading authority in the sustainable pest control sector and beyond. "We started Med-X to position Nature-Cide and Thermal-Aid as national brands, not realizing that Nature-Cide would garner interest worldwide. We are raising capital to position the company with the proper requirements to list on the NASDAQ, specifically growing the Company's Net Tangible assets". The company's growth is further supported by broader cultural and market shifts. Global trends emphasizing transparency and health-conscious lifestyles resonate deeply with Med-X's core values. This alignment has created a fertile ground for substantial international growth and expansion of Nature-Cide products. Shaping the Future of Pest Control Matthew Mills envisions Med-X as more than just a business; he sees it as an influential entity with the potential to drive significant change. He aims to utilize Med-X to influence policy, shape consumer behaviors, and redefine the established norms not only in pest control but across multiple industries. This long-term vision positions Med-X as a catalyst for a more sustainable and a health-conscious future.
