3 days ago
- Business
- The Herald Scotland
Irvine haulier Maxi Caledonian slams inheritance tax plans
His comments came as new accounts show Maxi Caledonian, which owns firms in property and construction as well as haulage, reported a pre-tax profit of £3.6 million in the year ended September 30, down from from £4.5m the year prior.
Turnover increased to £105m from £102.2m in 2023, which was the first time in the history of Maxi Caledonian that revenue had exceeded £100m.
The UK Government sparked controversy with proposals to revamp inheritance tax in in the Autumn Statement, part of a package of measures designed by Chancellor Rachel Reeves to raise £2 billion over the next five years.
The proposals to reform agricultural property relief and business property relief have led to widespread protests by the farming community, and will see inheritance tax charged on assets valued at more than £1m at an effective rate of 20%.
Farming chiefs say the changes will affect up to 70,000 farms but the UK Government insists the figure is much lower, with the Treasury stating that it expects around 500 estates to be impacted. A report published by CBI Economics yesterday found that the reforms could threaten over 200,000 jobs and cut almost £15bn in economic activity by the end of this Parliament.
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Maxi said in a statement: 'Whilst we normally avoid such comments, we consider that the current Government's proposed heavy taxation of privately owned companies upon the death of shareholders removes planned essential business capital necessary for stability and continued growth and will adversely affect many private companies and associated employment increases.
'This appears to be the opposite of what the Government is claiming their primary objective is - namely to grow the economy - and successful expansion of private companies must be a major contributor to achieve this objective.'
Maxi, which has depots in Scotland, England and Wales and operates across the UK and Ireland, said the period covered by the accounts had been 'another successful year'. However, the accounts note that margins had been reduced in its dominant haulage business, 'in common with the industry's trends'.
Accounts filed for the haulage business show that turnover increased to £84m from £80.9m. However, its pre-tax profit tumbled to £1.39m from £2.65m 'as a result of poor trading conditions due to continuing inflation and difficult market conditions'.
The accounts state: 'Our strong balance sheet, financial reserves, no borrowings, and our substantial continued investment in a modern fleet coupled with our strong management team puts us in a strong position for continued expansion in a hopefully improving market and we expect to report an increase in margins post-year end.'
The company said Maxi Construction performed well over the period, and that the trend had continued into the current year. The division booked an operating profit of £2.5m, up from £1.7m, as turnover dipped marginally to £20.5m from £20.7m, 'reflecting the continued success of the company and the strength of our management team'.
The Maxi Construction accounts state: 'Our balance sheet remains strong with significant reserves which supports growth and maintains customer confidence in what remains a very competitive market.'
Max Properties, which had been a separate company with a common shareholder, has now been brought into the Maxi Group as a wholly owned subsidiary. The most valuable of the properties in its portfolio are occupied by Maxi Haulage.
'During the year these properties were revalued, resulting in a loss of £0.9m within the profit and loss in respect of those classed as investment properties,' the accounts for Maxi Caledonian state. 'Prior year comparatives reflect the position had it always been part of the group.
'The group balance sheet remains strong and with the addition of the property assets of Maxi Properties Ltd we retain strong financial reserves which are available for investment and expansion. The group had another successful year, but haulage activities resulted in reduced margins, in common with the industry's trends.'
The accounts for Maxi Caledonian show the group employed an average of 377 people over the period, down from 384 the year prior, with 341 in haulage and warehousing, and 36 in construction. Payroll costs increased to £17.3m from £16.9m.
Alan Miles, managing director of Maxi Haulage, will retire in November after 29 years with the company. Maxi said Mr Miles had "achieved great success and growth" during his time with the company, and noted that he will remain with the business in a consultancy role.
Group deputy chairman Richard Atkinson, who has responsibility for the haulage division, said that succession planning was in place to ensure the "continuing successful management and growth" of the haulage and warehousing business.
