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Rachel Reeves’ controversial inheritance tax changes could lead to the loss of over 200,000 jobs and cost the UK economy £14.9 billion, according to new research by independent consultancy CBI-Economics. The study, commissioned by Family Business UK, surveyed over 4,000 businesses and farms, revealing the widespread impact of the so-called “tractor tax.”
The policy imposes a 20% inheritance tax on farms valued at £1 million or more, with ministers defending it as a necessary measure to address the UK’s financial shortfall. However, the research found that nearly a quarter of family businesses and 17% of farms have already cut jobs or halted recruitment, while 49% of farms have paused or canceled planned investments.
Despite growing backlash from the agricultural sector and warnings from the Office for Budget Responsibility (OBR) that the tax may generate less revenue than projected, the government is pressing ahead. Official figures suggest that up to 66% of farms could be affected, far more than the 28% estimated by the Treasury.
Interest-free payments for affected farms spread over ten years. Davy, CEO of Family Business UK, warned that “working people and communities who rely on family-owned businesses and farms will pay the price” of this policy. Meanwhile, the government maintains that most estates will remain exempt, with interest-free payments for affected farms spread over ten years.
As protests mount and industry leaders call for a policy reversal, the debate over the long-term consequences of Reeves’ tax reform continues to intensify.
200,000 job losses and a £14.9bn economic hit. Farmers and business leaders warn of devastating consequences, while the government insists the policy is fair. What’s your take?
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