{"id":813692,"date":"2024-12-21T23:20:58","date_gmt":"2024-12-22T05:20:58","guid":{"rendered":"https:\/\/newsycanuse.com\/index.php\/2024\/12\/21\/industry-clamour-grows-over-inheritance-tax-hike\/"},"modified":"2024-12-21T23:20:58","modified_gmt":"2024-12-22T05:20:58","slug":"industry-clamour-grows-over-inheritance-tax-hike","status":"publish","type":"post","link":"https:\/\/newsycanuse.com\/index.php\/2024\/12\/21\/industry-clamour-grows-over-inheritance-tax-hike\/","title":{"rendered":"Industry clamour grows over inheritance tax hike"},"content":{"rendered":"
\n

Construction figures are warning of a \u201csevere and long-lasting impact\u201d from proposed inheritance tax reforms, which are causing a “groundswell of anger” among family-run businesses in the sector.<\/p>\n

The Home Builders Federation and Builders Merchant Federation are among 32 trade associations that have signed an open letter to chancellor Rachel Reeves warning about the negative impact of the proposals.<\/p>\n

In the letter, Family Business UK (FBUK) chief executive Neil Davy called for a formal consultation on plans to make family businesses pay inheritance tax for the first time since 1976.<\/p>\n

In the letter, Davy argued that Reeves\u2019 proposals would have a \u201csevere and long-lasting impact on [family businesses] and the livelihoods of the millions of people they employ\u201d, forcing businesses to close prematurely and risking jobs across the country.<\/p>\n

Reeves announced in October\u2019s Budget that, starting from April 2026, Business Property Relief (BPR) on inheritance tax will be reduced from 100 per cent to 50 per cent after the first \u00a31m of property.<\/p>\n

This means family-run businesses will be subject to 20 per cent inheritance tax on assets above \u00a31m.<\/p>\n

According to the government\u2019s own figures, 81 per cent of construction SMEs are family-run.<\/p>\n

Davy cited FBUK-commissioned modelling by CBI Economics, which predicts the changes to BPR will result in more than 125,000 job losses across the economy and reduce economic activity by \u00a39.4bn.<\/p>\n

He wrote: \u201cNo other model of business ownership is subject to these punitive taxes when a business transitions ownership. BPR therefore allows family businesses to compete fairly with PLCs, private equity, and other models of businesses ownership.\u201d<\/p>\n

A formal consultation on the changes would allow consideration of alternative proposals which could \u201cstimulate the economic growth the country desperate needs\u201d, Davy wrote.<\/p>\n

The letter\u2019s signatories include Home Builders Federation chief executive Neil Jefferson; Builders Merchant Federation chief executive John Newcomb; Construction Plant-hire Association chief executive Steve Mulholland and Electrical Contractors\u2019 Association group chief executive Steve Bratt.<\/p>\n

Wates director James Wates and NG Bailey non-executive director Chris Bailey both sit on the FBUK board of directors, alongside Thomas Martin, chair of workwear business Arco.<\/p>\n

Build UK added its support to the open letter in a LinkedIn post on Tuesday (18 December). Chief executive Suzannah Nichol said family-owned construction business are \u201cvital to delivering the essential economic, social and housing infrastructure that the country needs and which are at the heart of the government\u2019s agenda\u201d.<\/p>\n

She added: \u201cThey are also crucial to ensuring the capacity is there to \u2018Get Britain Building\u2019, but in order to do that they need the confidence to invest in future generations and the existing workforce, which benefits so many local communities.\u201d<\/p>\n

Earlier this month, Builders Merchants Federation (BMF) chief executive John Newcomb warned<\/a> that the measures announced in the Autumn Budget could force leading merchants to cut their staff numbers and limit investment plans.<\/p>\n

Chris Hayward, chief executive of NMBS, the UK\u2019s buying society for independent merchants, said: \u201cWe have experienced a huge groundswell of anger over this.<\/p>\n

\u201cSmall family businesses are the lifeblood of this country, and generations of stability is being put at risk.”<\/p>\n

Hayward said the move on inheritance tax could force firms to sell assets, downsize or liquidate entirely to meet tax obligations.<\/p>\n

Other impacts could include disruption to succession planning, disincentives to investment, job cuts and reduced innovation, all impacting on the government\u2019s housebuilding target, according to Hayward.<\/p>\n

He said: \u201cWe have thousands of members who provide a crucial service for the construction industry generally, and there will be a ripple effect if businesses start to close. Labour must rethink its ill-guided decision.<\/p>\n

\u201cI\u2019m not talking about politics, but about the responsibilities of being in government and understanding that policies have impact on small businesses.\u201d<\/p>\n

Professor Noble Francis, economics director at the Construction Products Association, said: \u201cThe key issue is where the next generation is going to find the cash to take on the family business.<\/p>\n

\u201cIf they have to set aside money for inheritance tax, that\u2019s money they can no longer spend on the business, harming its viability.<\/p>\n

“This just adds to extra costs around the employers\u2019 national insurance contributions and national living wage rises.\u201d<\/p>\n

The boss of Britain\u2019s biggest builders\u2019 merchant site \u2013 showcased by Keir Starmer during a pre-election visit \u2013 has joined the chorus of protests over Labour\u2019s inheritance tax changes.<\/p>\n

David Berry, managing director of C and W Berry Ltd, based in Leyland, Lancashire, said: \u201cThe inheritance tax change is a huge burden on family businesses.<\/p>\n

“This is a new government and hopefully it will have the strength to listen and recognise it may have misjudged the full consequences of its decision.\u201d<\/p>\n

In an interview with Construction News\u00a0<\/i>earlier this month, CPA\u00a0chief executive Steven Mulholland called the changes to inheritance<\/a>\u00a0tax \u2013 coupled with increased employers\u2019 National Insurance contributions \u2013 \u201cvery, very narrow-minded\u201d.<\/p>\n<\/div>\n

Read More<\/a>
\n Charlotte Banks<\/p>\n","protected":false},"excerpt":{"rendered":"

Construction figures are warning of a \u201csevere and long-lasting impact\u201d from proposed inheritance tax reforms, which are causing a “groundswell of anger” among family-run businesses in the sector. The Home Builders Federation and Builders Merchant Federation are among 32 trade associations that have signed an open letter to chancellor Rachel Reeves warning about the negative<\/p>\n","protected":false},"author":1,"featured_media":813693,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[140324,648],"tags":[],"class_list":{"0":"post-813692","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-clamour","8":"category-industry"},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/813692","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/comments?post=813692"}],"version-history":[{"count":0,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/813692\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media\/813693"}],"wp:attachment":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media?parent=813692"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/categories?post=813692"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/tags?post=813692"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}