Reeves inheritance tax raid to cost ‘staggering’ 200,000 jobs
More than 200,000 jobs could be at risk over the next five years thanks to the government’s inheritance tax raid, new research suggests.
Chancellor Rachel Reeves introduced sweeping changes to business and agricultural property relief in the Autumn Budget last year, impacting family-owned business and farms across the UK.
A study from CBI Economics, commissioned by the lobby group Family Business UK, found 208,500 full-time jobs could be lost by April 2030 as a result.
The policy change is expected to raise around £1.8bn in tax revenue over the next five years, but at a net fiscal cost of £1.9bn.
CBI Economics also found the tax changes would result in a GVA loss of £14.8bn to the economy.
Changes to BPR and APR in the Autumn Budget limited 100 per cent relief from inheritance tax to the first £1m of claims, with a 50 per cent tax rate applied above this threshold.
Impact of death tax ‘staggering’
Responding to the research, shadow business secretary Andrew Griffith said Labour’s proposals were built on “hooky treasury maths and a blatant breach of election promises.
“The impact of the Chancellors death tax on farms is already understood – but the impact on family-owned businesses is many times that with a staggering 200,000 jobs at risk.
“This survey shows just how little this government understand or care about business,” he added.
In total, nearly half of family businesses anticipated reducing headcount, with an average decline of nine per cent in employment.
Around 50 per cent expect to pause or cancel planned investments, with a total decrease of 16 per cent in investment.
The agriculture sector is expected to see the steepest drop in investment, averaging a 17 per cent decline, according to CBI Economics.
A 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.”