Support needed for small businesses
The government is being urged to make good on its statements that growth is its number one priority and to think again about its inheritance tax plans.
The Federation of Small Businesses (FSB) says support for small firms must be at the core of the three strategies which will be unveiled this spring: the Industrial Strategy, the Small Business Strategy and the Trade Strategy.
And it has warned that nine out of ten small firms are concerned about changes to employment rights.
Martin McTague, who chairs the national organisation, said: “With two-thirds saying they are preparing to hire fewer staff, the Bill risks dampening growth, and harming the economy by reducing employment levels and deterring expansion.”
He added: “The forthcoming Spending Review must be used by the government as an opportunity to look at how to support small businesses.
“Small business owners, limited company directors, and the self-employed should be shielded from future tax rises, as it is small and medium-sized businesses who are the ones with the greatest potential to grow, if given the right conditions.”
Meanwhile, UK wealth managers have warned chancellor Rachel Reeves over plans to levy inheritance tax (IHT) on pensions.
The changes announced in the autumn Budget, aim to raise £1.5bn annually for the Treasury by 2030 by making pension funds part of inherited estates.
However, chief executives from major UK wealth managers, including Interactive Investor, Quilter and AJ Bell, have written directly to the chancellor sharing their concerns.
The business leaders have described the proposals as “flawed and potentially damaging”. And they warned: “The complexity of the proposed approach, namely bringing all pensions into estates for IHT, will lead to substantial delays paying money to beneficiaries on death and cause distress for bereaved families.”
They are calling on government to “work with the pensions industry to agree a simpler method of achieving the policy aim”.
The government estimates its proposals will bring approximately 1.5 per cent more estates within the scope of death duties by 2027-28.
Latest figures have revealed that IHT brought in more than £6bn for Treasury coffers. In the nine months to December were up £600m compared with the same period in 2023, according to HM Revenue and Customs figures.
The changes to the IHT regime prove a good starting point when it comes to turning your attention to estate planning.
Now it’s a good time to ensure it is up to date and is fit for purpose. It should meet all your wishes when it comes to the distribution of your assets through your family.
• To discuss any issues raised by this article please contact me on 01772 430000
