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ITV News
a day ago
- Business
- ITV News
Inheritance tax poses difficult decisions for Northern Ireland farmers
Getting your head around numbers can sometimes be a difficult task. Even more so when it comes to exactly what Northern Ireland's farming community has had to do though, in just a few the end of 2024, the Labour government said it was going to remove relief on inheritance tax for farmers. From April 2026, agricultural assets which total over £1m will be taxed at a rate of 20%.That includes animals, buildings and land - with change now looming for many farms in Northern have been exempt from Agricultural Property Relief and Business Property Relief for many years but that could now be was a decision not welcomed by many farmers then, and even now, including dairy farmer Keith runs a large operation just outside of Newry, Co Down.'The simple fact is that the sector isn't profitable enough whenever you count the valuation of property, to be able to sustain this for one generation, never mind two.'Keith spoke to UTV at Markethill Livestock Sales in Co Armagh. Dairy and beef cattle were being sold on the day of filming and interest was still strong, but under it all, lay concern for what the future Hewitt is the man behind the microphone and the man who coordinates the sales. 'They (the government) have brought these proposals in, genuinely without thinking about it and not realising the knock-on effect,' he added that he was worried about the 'long-term' effects on farmers and other way farms can be exempt from the new proposals is if the family farm is gifted, but the donor must live on it for seven years Kinnear was forced into adapting, not by his own father John died in 2017, leaving the family farm in Derrynoose to his mother Shirley before she passed it on to Timothy.'Something so simple can absolutely obliterate farming,' he told UTV.'If they (the government) don't watch themselves, they will do away with Irish produce.'If inheritance tax hit me today, I would have to sell a third of the place and if I was to sell a third of the place there wouldn't be enough income to support me or if I was to have a future family.'The Ulster Farmers' Union is urging the government to take on the concerns of farmers in Northern Ireland.'It is gut-wrenching and really does pull on the heartstrings, some of the things which farmers are actually considering,' said James McCluggage from the union.'We need to see some sort of morality clause in there for the elderly, for the disabled, for those who are incapacitated, that [sic] can't make a decision or cannot get plans in place at the moment.'The government says the changes won't affect every farmer and that they are necessary to better fund public a statement, a spokesperson for the Department for Environment, Food and Rural Affairs said: 'Our commitment to farming and food security is steadfast, which is why we've allocated a record £11.8billion to sustainable farming and food production over this parliament. 'We are also slashing costs and red tape for food producers to export to the EU, have appointed former NFU president Baroness Minette Batters to recommend reforms to boost farmers' profits, and we're ensuring farmers get a bigger share of food contracts across our schools, hospitals, and prisons.'For now, the industry looks determined to continue speaking up as farmers prepare to count the cost of change, whatever it may be. On Friday UTV were joined by Agriculture Minister Andrew Muir to address the central issues within the farming community.
Yahoo
13-06-2025
- Business
- Yahoo
The ‘experts' you've never heard of inspiring Rachel Reeves's disastrous economic policy
A little like the Chagos Islands giveaway and, more recently, the apparent Gibraltar sell out, it's almost impossible to work out the motivations behind each and every idiotic decision this Labour Government takes. There's a palpable sense of incredulity spreading across Britain as the Prime Minister and Chancellor continue to insist that everything is going swimmingly despite most key markers showing precisely the opposite is true. Take the economy. In Wednesday's Spending Review, Rachel Reeves boasted that she had 'wasted no time' removing the barriers to growth. Less than 24 hours later, the Office for National Statistics (ONS) revealed that UK GDP had shrunk by 0.3 per cent in April. Labour continues to splurge taxpayers' hard-earned cash despite the national debt sitting at around 96 per cent of GDP, the budget deficit more doubling in the past seven years, and public spending being on a par with the profligate Labour government of the 1970s, which almost bankrupted the country. Back then, taxes as a share of GDP were around 33 per cent. Forecasts suggest that, by 2027, they could reach 37.7 per cent. Unemployment is at its highest level in four years, UK payrolls have lost 276,000 employees since the autumn Budget, and a millionaire is reportedly leaving the UK every 45 minutes under Labour. Still, no one in the Cabinet appears able to rule out further tax rises, with Paul Johnson, the outgoing chief of the Institute for Fiscal Studies (IFS) concluding that 'council tax bills look set to rise at their fastest rate over any parliament since 2001-05.' Who is advising Reeves on tax policy, and her relentless assault on our wallets? Readers may not have heard of Arun Advani and Andy Summers, but these little known academics may have been the inspiration for Labour's seemingly never-ending tax grab. They run the Centre for the Analysis of Taxation (CenTax), which some credit for Labour's farm tax. Advani, who is associate professor in the economics department at the University of Warwick, called for inheritance tax 'loopholes' on farms to be scrapped in two reports for the Institute for Fiscal Studies, as well as writing a further report for CenTax making the same arguments for changes to both Agricultural Property Relief (APR) and Business Property Relief (BPR) last October. After Advani boasted at the Labour Party Conference that he was 'optimistic' because the Labour government is 'genuinely listening' to his ideas, Reeves announced in the Budget that the availability of 100 per cent relief for agricultural and business property would be capped at £1 million. So far, so predictable, you may argue. What's the harm in tapping up Left-wing think tanks for radical tax ideas? Do Conservative governments not rely on the research of free market institutes? Well, some have alleged the Treasury relied solely on CenTax's projection that the changes would raise £520 million, without doing its own calculations. As it conceded in response to a Freedom of Information request: 'H M Treasury does not hold a disaggregated cost projection for the revenue raised from the measure announced at Autumn Budget 2024 to restrict these reliefs. This is a combined policy across the reliefs, rather than separate policies for each relief.' Even more problematically, the £520 million figure has been challenged. The OBR itself said it was uncertain how much would be raised as a result of behavioural responses, whilst CBI Economics calculates that the new tax on both family firms and farms will actually cost the Treasury £1.9 billion over the next five years. Advani claimed that only around 500 farms would be affected by the tax. As the Adam Smith Institute points out, however, 'the government's much-quoted '500' a year is really 15,000 a generation.' The true number of farms could be more than 40,000. Separate research, commissioned by Ashbridge Partners, found that one in 10 farmers surveyed said they will face an IHT bill of more than £1 million due to the inheritance tax hike, with 31 per cent expecting to pay more than £500,000. Why didn't Labour listen? Treasury minister James Murray, who referenced back in 2022 how many Zoom meetings he'd held with Dr Summers, even hosted CenTax's official launch in Parliament last November when he declared his desire 'to make sure that collaboration between CenTax, Treasury and HMRC continues for many years into the future.' Advani and Summers also influenced Labour's pledge to scrap non dom status with Treasury ministers again seeming to unquestioningly swallow their claim that it would raise £3.2 billion, a figure repeatedly cited by the Government. The trouble is, that number was also based on some misguided premises, perhaps including Advani and Summers' quite ludicrous prediction that out of 70,000 non-doms, only 77 would leave. As other economists later pointed out, the projection did not take into account the impact of abolishing non-dom inheritance tax protections. Even the OBR assumed that the changes would likely lead to a loss of 25 per cent of non-doms with trusts, which could cost the UK more than £12 billion during the course of the parliament. Still the Government swallowed the £3.2 billion figure hook line and sinker despite some now estimating that 10 per cent of non-doms may have already left the UK. A report by the CEBR predicts the ongoing exodus could reach 40 per cent – costing the Treasury a self-defeating £7.1 billion over this parliament. This combined with the £1.9 billion revenue lost as a result of the farm and family firm tax could mean the Government is down £9 billion thanks to listening to these nitwits. CenTax also wrongly predicted that increasing the tax rate on carried interest to 45 per cent would raise additional revenue of £0.8 billion per year. Labour settled on 32 per cent – but a January 2025 estimate by the OBR suggests that only £100 million will be raised and since then Reeves has watered it down. Labour claim to be a 'party of business'. So why are they seemingly listening to two economists who are laying the intellectual groundwork for an expansion in taxation that could come to look like Corbynism on steroids. Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
ITV News
13-06-2025
- Business
- ITV News
Cornish Ayr Holiday Park owner feels ‘victimised' by government tax changes
ITV News West Country's Grace Pascoe has been speaking to the owner of the holiday park. The owner of a Cornish holiday park says he feels 'victimised' by the current Labour government due to changes in Business Property Relief and Inheritance Tax. Andrew Baragwanath, who owns Ayr Holiday Parksays, says the changes could cost him around 1 million pounds in what he calls a 'tax grab' by the government. The changes have led him to consider holding off on new investment in the business and to not replace employees who leave. He said: 'We have about 30 employees here at the moment, which we keep on all year round. Due to some of the tax changes, I now would look very carefully at replacing any employee that left. "Similarly, I'm looking at whether to replace any caravans. Normally I buy new caravans every year, that may not be possible now. "We've got to look at retaining money in the business or taking out perhaps insurance policies, spending money on legal and accountancy advice, which, frankly, we just see is dead money. "It's all about looking how to protect the business from what we see as a tax grab. I feel victimised by this government. "It's almost as though we're the enemy and they don't want family businesses to thrive. And I know we want to fund the NHS and all the other things government has to do, but they also have to take into account there is an unintended consequence". Andrew still hopes to pass the family run holiday park on to his daughter who is involved in the business but is considering all options. "The impact of the business property relief and inheritance tax changes is quite massive. Potentially it could put a £1 million tax bill on the business. One exit would be to sell the whole business, but quite likely it could be bought by one of the big groups. "I think it's a shame because you then lose out on the personal attention and the detail on the park and the care you get from being family-owned rather than being part of a group". A new report from Family Business UK and CBI Economics reveals that family-owned businesses in the South West are expecting to cut almost 19,000 jobs and reduce investment by more than 16% leading to a drop in economic activity worth almost £1.3bn. Deborah Walker, Director General of the British Holidays and Home Parks Association wants the government to reverse its decision. She said" 'We're urging the government to take another look at the figures. The government thinks that it's going to raise taxes with this inheritance tax. "But the figures show that there actually is actually going to cost the Treasury £130 million and what it's also going to do is force much loved family-run businesses to have to sell up or close down and those are exactly the sort of businesses that are driving rural and coastal economies.' The new rules on Business Property Relief are set to come into effect in April 2026. In response a HM Treasury spokesperson 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. 'Capping the rate of corporation tax, reforming planning, establishing a National Wealth Fund and creating pension megafunds is part of our Plan for Change to get Britain building, unlock investment and support business so we can raise living standards and make all parts of the country better off'.
Spectator
02-06-2025
- Business
- Spectator
Rachel Reeves risks killing off the family business
Changes to how inheritance tax and trusts are treated for non-doms have already put the nation's finances on shakier ground – something I revealed in a cover story last month. Now, a new report suggests these anti-business Treasury policies may risk killing off Britain's family firms too. Fresh analysis by the CBI's economics consultancy, commissioned by Family Business UK, warns that these changes to inheritance tax could jeopardise more than 208,000 full-time jobs over the course of this Parliament. That's more than the entire construction workforce in London. The report says that as small firms retreat from long-term investment, the wider economic consequences could be severe. The government is planning to reform Agricultural Property Relief (APR) and Business Property Relief (BPR) – two long-standing mechanisms that can offer up to 100 per cent exemptions from inheritance tax on qualifying land and business assets.
Telegraph
20-05-2025
- Business
- Telegraph
Reeves's inheritance tax raid will destroy generations of honest work
In 1891, Jonathan Fothergill became the managing director of Pickerings Limited, one of the oldest engineering firms in the country. Six generations later, the business remains in the ownership and management of the Fothergill family, trading out of its original site on Norton Road, Stockton-on-Tees. But the future of that unbroken family connection suddenly seems much less assured. For nearly 50 years, qualifying businesses have been allowed to pass assets down the generations without incurring inheritance tax. Business Property Relief (BPR), introduced by a Labour government in 1976, was designed to reduce the tax burden on transfers of business assets – encouraging the continuity of family businesses. That is set to change, striking at the foundation of family firms such as Pickerings Limited. Under new rules being brought into effect from April 2026 by Rachel Reeves, full business rates relief will only apply to the first £1m of a business's assets upon the owner's death. Everything above that threshold will be subject to 20pc tax. This policy change has been branded 'myopic' by its critics. It might yield a one-off tax hit, but then what? 'Family businesses are now going to have to sell in order to pay the tax bill,' fears Kiran Fothergill, a descendant of Jonathan and director of Pickerings Lifts – as the company is now known – who stood as a Conservative candidate in the last general election. 'What we are going to end up with is businesses being sold to possibly foreign owners,' or corporations, with future revenues heading out of the country, into off-shore companies or other clever tax structures. And with that, 'any feeling for the community or the history is lost'. 'Family businesses have a completely different time horizon to corporates,' Mr Fothergill explains – investing years into a business, building up a community of customers and employees. Corporate short-termism would likely mean job losses with generations uprooted. 'This policy change is a fallacy,' Mr Fothergill tells me. 'It's going to cost us as a society, and the structural damage to the UK economy would be irreparable.' Lance Forman, the fourth-generation owner of H Forman and Son and a former Brexit Party MEP, agrees. His family has been curing and smoking fish in the East End of London since 1905. ' Family businesses are very, very different to corporations. They are profit satisfiers, not maximisers. As long as they make enough for the families to maintain the standard of living they are used to, they are satisfied.' 'We take the good years with the bad years,' he adds. This is one star difference between family businesses and corporations, where the primary motivation is profit maximisation within a relatively short time frame – often through higher prices and job losses. Is selling the only option? Tax professionals tell me the looming BPR changes are increasingly dominating discussions, especially at board level. Mr Forman is sceptical of effective tax planning options available to his family. 'One other option would be to invest in an insurance policy, itself at a huge cost. But that would be instead of investing in the business. Where is the sense in that?' 'There's no incentive to build the business up for the new generation, to build a business for the future.' The removal of tax relief is rarely a popular event, but the benefit to the wider society in some cases can outweigh the costs. It is difficult to view the proposed changes as anything but a political miscalculation which strikes at the heart of business – aspiration.
