Tax miscalculations

Economists have warned that Reeves’ inheritance tax raid will cost the Treasury over £1 billion more than it makes.

Analysis by CBI Economics shows the Treasury has ‘underestimated the impact’ of changes to business property relief (BPR), namely the majority of family businesses being forced to cut investment because of the raid.

The complete shelving of any plans for growth in the face of such large tax bills (even downsizing in some cases) will lead to the loss of 125,678 jobs, argue the economists.

The government will lose £2.6 billion in tax revenue as the take from things like corporation tax, income tax and national insurance falls drastically over the next five years.

Farmers have been highlighting this since the Budget capped their inheritance tax relief at £1million, an inadequate figure when a combine harvester costs up to £750,000.

Labour’s raid on farmers will raise an estimated £520 million a year by 2030, a amount capable of funding the NHS for only one day and five hours.

But as farmers shelve all plans for investment and growth and even scale back elements of the business to protect them from IHT, the tax take from businesses' trading will likely fall more than the amount raised in the first place according the economists' analysis.