Under Rachel Reeves latest budget plan‚ family businesses face harsh new tax rules that target their very existence. The govtʼs approach seems to follow old-school socialist ideas - picking specific groups and making them pay extra (which doesnt help anyone in the long run)
The changes hit hard at inheritance tax shields that protected family companies since mid-70s. Neil Davy from Family Business UK points out some troubling facts:
These changes to business property relief are basically the same as getting rid of it completely; our data shows it will lead to £29bn less economic activity and 391‚000 lost jobs
The math is simple but scary - any farm worth more than £1m (thats about 70 acres with a house) will pay 20% death-tax; this affects like 85% of UK family farms. A typical 217-acre farm worth £2.46m would need to pay £293‚220 in taxes‚ which is just too much for most families
Hereʼs what makes it worse for rural communities:
* Big corporations will buy up local farms
* Solar and wind companies can grab more land
* Property developers will expand their holdings
* Family-run businesses might close down
Sir Keir Starmer and his team told farmers they wouldnt touch agricultural property relief - but here we are. Labour won in 114 rural areas last time; now these tight-knit communities (where family values mean everything) probably wont forget this u-turn
The Office for Budget Responsibility already sees slower growth ahead - looks like Reeves halloween-timed budget might scare away more than just farmers