Four in five family businesses have accused the Labor Party of misleading voters about its tax plans, according to a survey by Family Business UK.
The trade association has raised serious concerns about potential changes to long-standing tax credits, particularly the business property exemption, which would allow families to pass on business assets with reduced or no inheritance tax.
Neil Davy, CEO of Family Business UK, warned that Labour’s tax policy could jeopardize the future of family businesses, which employ 13.9 million people and contribute more than £200 billion in taxes every year. Research from the organization shows that many family businesses could face serious consequences if tax benefits are cut, with some companies forced to freeze hiring or sell assets to manage the increased financial burden.
The most alarming finding is that a fifth of family businesses could be forced to close or liquidate to pay inheritance tax if the business property exemption is reduced or abolished. This exemption, which has existed for decades, allows businesses to be passed on from generation to generation, with a full or partial reduction in the standard 40% inheritance tax rate.
Davy also criticized the government for creating uncertainty, stating that many family businesses are delaying crucial investment decisions pending confirmation on the future of this tax policy in the upcoming budget on October 30.
The research, carried out by Censuswide, shows that more than a third of family businesses expect significant tax increases in the budget, with 27% planning to freeze hiring and 12% considering redundancies to cover rising costs. A quarter of respondents indicate that they will pause important investments.
The association, which represents 200 of Britain’s largest family businesses including Wates, NG Bailey, Bettys and Taylors of Harrogate and Rigby Group, has urged the Government to maintain current tax cuts to support family businesses and their contribution to the economy to protect. British economy.