In Part 2 of this compelling episode of The Cashflow Show Podcast, host Clayton M. Coke sits down with Fiona Graham, Chief Operating Officer of Family Business UK, to explore the devastating impact of proposed inheritance tax reforms on family-owned businesses. Fiona shares her expertise on advocating for family businesses, the economic significance of the sector, and the urgent need for policy consultation to protect jobs and growth. From the potential loss of 208,000 jobs to a £1.9 billion fiscal hit to the Treasury, this episode uncovers the real consequences of these reforms and what can be done to address them.
Key Discussion Points:
- Role of Family Business UK: Founded nearly 25 years ago, Family Business UK supports family-owned businesses by addressing unique challenges like succession planning and family disputes while advocating for tailored policies.
- Inheritance Tax Reforms: Proposed changes will scale back long-standing tax reliefs, leaving family businesses with significant tax bills upon an owner’s death, threatening their survival.
- Economic Impact: The reforms could lead to 208,000 job losses, a £15 billion reduction in economic activity, and a £1.9 billion fiscal loss to the Treasury.
- Advocacy Strategy: Fiona emphasizes the power of direct voices from family business owners in influencing policymakers and highlights the need for urgent consultation.
- Mid-Sized Business Forum: A government-supported initiative to focus on the “missing middle” of mid-sized businesses, many of which are family-owned, to drive UK economic growth.
- Economic Contribution: Family businesses contribute £422 billion in tax receipts to the UK Exchequer, underscoring their critical role in the economy.
Key Takeaways:
- Inheritance tax reforms pose a severe threat to family businesses, with no ability to plan for unexpected owner deaths.
- The economic fallout includes significant job losses, reduced growth, and a net loss to the Treasury, making the policy counterproductive.
- Policymakers need to hear directly from family business owners to understand the real-world impact of these changes.
- Family businesses are the backbone of the UK economy, contributing substantially to tax receipts and local communities.
- A lack of prior consultation with businesses has led to a short-sighted policy that requires urgent review.
Notable Quotes:
- “Nothing is as powerful as hearing directly from family business owners about how changes will affect them.” – Fiona Graham
- “Family business is the backbone of the UK economy. It’s living, it’s breathing, and these people want to be around for generations more to come.” – Fiona Graham
- “This policy fails on every account. It will hit jobs, it will damage growth, and ultimately it will bring in less tax.” – Fiona Graham
Actionable Insights for Businesses:
- Engage with Policymakers: Contact your local MP to share how inheritance tax reforms could impact your business and community, using Family Business UK’s constituency-level data.
- Join Family Business UK: Become a member to access support, share challenges, and amplify your voice in policy discussions.
- Participate in Family Business Week: Celebrate and promote your business’s story during this November event to raise awareness of the sector’s importance.
- Review Succession Plans: Work with advisors to explore strategies that mitigate the impact of potential tax changes, despite uncertainties.
- Stay Informed: Visit familybusinessuk.org for updates and resources to navigate these reforms and advocate for change.
Resources:
- Website: familybusinessuk.org
- LinkedIn: Follow Family Business UK for updates and insights.
- Report: Access Family Business UK’s report on the economic impact of inheritance tax reforms at familybusinessuk.org.
- Contact: Reach out to Family Business UK via their website to join or learn more about advocacy efforts.
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Clayton M Coke can be found here:
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