Rachel Reeves's proposed changes to inheritance tax reliefs for farmers and family businesses could lead to significant adverse economic consequences, according to a new analysis. The reforms, aimed at generating £1.8 billion by 2030 through new taxation on inherited assets over £1 million, may instead diminish investment and lead to job losses. Over 60% of affected businesses plan to reduce investments by over 20%, and job cuts could exceed 200,000 in vulnerable regions. Experts warn that these tax changes might ultimately drive the Treasury into a fiscal deficit rather than achieving the intended revenue increase.
Reforms to Business Property Relief (BPR) and Agricultural Property Relief (APR) aim to generate revenue, but may cost the Treasury nearly £2 billion by 2030.
The CBI Economics study warns that over 60% of family businesses and farms plan to cut investment due to new inheritance tax measures.
Neil Davy of Family Business UK cautioned that these reforms risk damaging the backbone of the British economy: family businesses and farms.
Industry groups, including the National Farmers Union, are calling for a delay or reversal of the tax reforms due to potential negative impacts.
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