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Oh dear...
https://www.telegraph.co.uk/business/2024/12/16/reeves-inheritance-tax-raid-cost-more-than-it-makes/
Looks like Labours IHT raid will cost the country money overall - in which case why are they doing it?
In case the link doesn't work, here a quote: "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 that Ms Reeves hopes to raise from cutting BPR, meaning that the Exchequer will be £1.26bn worse off than under the status quo."
"I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]0 -
Not exactly a neutral perspective, but a much better reason for rethinking than 'won't someone think of the poor business owners'. As you say, if it's going to create a net decrease in revenue then what's the point?
1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
Pinnacle Monzonite
Part of the anti-growth coalition0 -
I'd be interested in seeing the analysis behind it, as I don't trust the reporting to accurately reflect it. It also seems to depend quite heavily on self reported responses to a survey that was designed to get this result.
If the OBR comes up with the same numbers with a more rigorous approach, then there will be changes to it.
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There's something a little fishy about quoting those job losses to so many significant figures.
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This is doing well in the charts - wonder if it'll be the Christmas number 1? 😀
"I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]1 -
Absurd comparisons from Labour backbenchers.
Coz ignoring years of public information is just like being trapped in a burning building or crushed to death.
1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
Pinnacle Monzonite
Part of the anti-growth coalition0 -
Yeah, it seems that Corbyn is suggesting compensation of £10bn should be doled out from the magic money tree, and that some Labour MPs are attaching themselves to that fantasy.
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