FBUK says media reports the Government may be looking to change the rules on Lifetime Gifts in the Autumn Budget would be “an enormous disincentive” that would “further reduce investment and jobs.”
The reports were first published by The Guardian newspaper.
In response, FBUK CEO Neil Davy wrote to the paper saying:
New changes to inheritance tax, and their impact on Britain’s family businesses, will lead to further economic damage as owners again cut investment and jobs.
The Guardian’s article states that changes to IHT announced in last years’ budget may have a significant impact on how much money is raised by IHT, but it is unclear how they might alter behaviour.
Neil Davy continues:
Independent research conducted earlier this year, commissioned by FBUK and conducted by CBI Economics, has already answered these questions.
Responses from over 4,200 UK family business owners and backed by over 30 leading industry bodies, predicted that far from increasing tax receipts, capping APR and BPR at £1m will result in a net fiscal loss to the Treasury of £1.9 billion over the course of this parliament.
The research also predicted a reduction in GVA of £15 billion to the UK economy, and the loss of 208,500 full time jobs and as a direct result of the policy change.
And we know precisely how family business owners have behaved; 55% have already paused or cancelled planned investments (and a further 44% expect to do so); 23% have reduced headcount; 12% are contemplating selling their businesses or shutting shop entirely.
Our research remains the only credible assessment of the impact of changes to inheritance tax on family businesses in last year’s budget.
Another potential hit on family business through more IHT policy changes will act as an enormous disincentive, and business owners will further reduce investment and jobs.
We continue to urge the Government to hold a formal consultation on the changes so that IHT policy changes can achieve their stated objective of raising tax receipts, whilst continuing to protect family businesses and incentivise them to invest and support badly needed economic growth.
You can read and download a copy of our research by clicking the image below.
