The true cost of inheritance tax reforms in your area

The CLA remains unwavering in its stance on proposed inheritance tax changes. Our lobbying efforts to the government continue to push for a reversal, or sufficient mitigation, of the proposed changes to agricultural property relief (APR) and business property relief (BPR).

As part of our wider campaign, we have backed a study looking into the economic and fiscal impacts of changes to the taxes, chiefly commissioned by Family Business UK and conducted by independent consultancy CBI Economics. More than 4,000 businesses and farms across the UK took part in the research, including many CLA members, and the results revealed some startling figures that illustrate the extent of the impact that inheritance tax (IHT) changes will have on the UK.

Some key takeaways from the survey results:

• As a whole, the proposed inheritance tax changes have the potential to lose the Treasury £1.9bn of income and cost the overall economy £14.9bn in lost business revenue.
• More than 200,000 jobs could be lost during this parliament due to reductions in recruitment.
• 23% of businesses have already cut jobs and paused recruitment ahead of the changes.
• 55% of family businesses and 49% of farms have already cancelled proposed investment projects since the changes were announced.

For the first time, this data also reflects the affect that the changes will have on individual and constituencies. Follow the links below to find out how gross value added (GVA) and job losses are impacted in your region.

As part of our wider lobbying campaign, this week we wrote to Labour MPs who have indicated that they support the government or have stayed silent on the changes. The purpose of these letters were to highlight the impact that these proposals will have directly on voters in their constituency.

In these messages, we focused in particular on the significance of job losses and reduction in the gross value added (GVA) in each constituency. We urged the MPs to consider the ‘clawback’ alternative which will mitigate much of the negative impacts of the current proposals and advised them to work with the CLA to amend the Finance Bill in the Autumn, where these changes will be voted on.

The majority of our letters were addressed to rural Labour MPs who have not publicly voiced their concerns about the impact of these changes on CLA members and the wider rural economy.

MPs of note include:

• MP for Hemel Hempstead, David Taylor, whose constituency will lose 937 jobs by the end of parliament and see a reduction of £53.16m in GVA.
• MP for North West Leicestershire, Amanda Hack, which will lose £44.57m in GVA and 679 jobs.
• Farming Minister, Daniel Zeichner, whose Cambridge constituency will lose £44.66m in GVA and 667 jobs.
• Warwick and Leamington MP, Matt Western, whose constituency will see a reduction in GVA by £47.89m and 631 jobs lost.
• Peter Prinsley, MP for Bury St Edmunds and Stowmarket, which will lose £37.01m in GVA and 604 jobs.

To reflect the impact on the wider UK economy, we also wrote to urban MPs who will see their constituencies devastated by IHT proposals too. These seats will be hit by the changes to BPR, of which many multigenerational businesses rely on, but have representatives that are remaining quiet on the tax changes.

The worst hit urban seats include several senior Labour politicians and cabinet ministers. Most significantly, this includes the Prime Minister Sir Keir Starmer who will see his Holborne and St Pancras constituency lose over 1,000 jobs and a reduction of its GVA by nearly £125m if these changes are implemented.

Other key figures include:

• Rachel Blake, MP for Cities of London and Westminster, which will see a reduction of £629.91m in GVA and 4,827 jobs lost.
• Justice Secretary Shabana Mahmood, MP for Birmingham Ladywood, which will lose £132.44m in GVA and 1,879 jobs.
• Leader of the House of Commons, Lucy Powell, MP for Manchester Central, which will see a reduction of £133.63m in GVA and 1,782 jobs lost.
• Secretary of State for Northern Ireland, Hilary Benn, MP for Leeds South, which will lose £82.73m in GVA and 1,122 jobs.

To guarantee that your concerns are heard, the CLA will continue to apply pressure on all Labour MPs, both urban and rural, to ensure that they are aware of the harmful consequences of this policy and the damage it will have on businesses throughout the UK.