Thieves IHT raid backfires16 Dec 2024 07:43
“Rachel Reeves’s inheritance tax raid on family businesses and farms will backfire by costing the Treasury over £1bn more than it makes, economists have said.
A drop in investment caused by the Chancellor slashing tax relief risks outweighing the extra income the Exchequer expects to gain from the changes, according to analysis by CBI Economics.
Its report says the Treasury has “underestimated the impact” of changes to business property relief (BPR), with the majority of family businesses forced to cut investment because of the raid.
Analysts estimate that 125,678 jobs will be lost as a result. Overall, the loss of economic activity will lead to a £2.6bn reduction in income from taxes such as corporation tax, income tax and national insurance over the next five years, the research suggests.
This is much more than the estimated £1.38bn in extra inheritance tax Ms Reeves hopes to raise from cutting BPR, meaning that the Exchequer will be £1.26bn worse off than under the status quo.“
Get back to your clerks job at the bank Rachel.