Report on the impacts of inheritance tax reforms cannot be put any clearer, says FUW

An independent report recently published by CBI Economics and commissioned by Family Business UK provides comprehensive estimates of the economic and fiscal impacts of the proposed Business Property Relief (BPR) and Agricultural Property Relief (APR) reforms for family businesses and farms across the United Kingdom.

In summary, the report analyses the findings from 4,147 family businesses and farms across the UK. It suggests that the reduction in business activity will lead to a loss in Gross Value Added (GVA) of £14.8 billion over the next five years.

This could lead to a potential loss of 208,500 full time jobs, and while the Exchequer expects to raise £1.8 billion in tax revenue by 2030 as a result of the reforms, the report estimates a net fiscal loss of £1.9 billion over the same period.

Responding to the publication, Gareth Parry FUW Head of Policy said: “The findings from this comprehensive report are alarming, although not surprising for the Farmers’ Union of Wales. These figures demonstrate exactly what we, and many others, have been warning about since the Budget Statement last year.

“Specifically for the farming sector and its associated supply chains, the proposed APR reforms are predicted to result in 28,300 job losses, demonstrating yet again the HM Treasury’s failed attempts to justify its proposals based on simple economic calculations. The potential wider economic and social impacts are now clear to see.”

For both business turnover and investment, the agricultural and horticultural sector is expected to see the greatest declines. In Wales, the changes are expected to reduce GVA by £580 million, result in 9,715 job losses and reduce business turnover by 12.2%.

“Whilst our focus is clearly on the agricultural sector in Wales, this report highlights very clearly the possible financial impacts for family businesses across all UK sectors.

“We will certainly be referring the Welsh Affairs Committee to the findings of this report as they continue with their inquiry into the opportunities and challenges of farming in Wales on Wednesday.

“But with such clear and comprehensive analyses now available on the UK-wide impacts of these reforms for all family businesses, how long can the UK Treasury continue to ignore such findings before agreeing to work with all sectors to design a fair policy?”