The Family farm tax is very damaging. It was troubling older farmers greatly, threatening splitting up farms and making the less viable. Now some of the smaller family farms have been exempted. Still many small businesses and some of the larger family farms are being attacked by IHT, making it difficult for them to pass them on to a new generation of owner/managers. It puts people off building businesses here in the UK or leads to early closure.
More damage was done to more people by the Jobs tax of the first Labour budget, the hike in Employers National Insurance. As some of us forecast there has been a fall in vacancies, and a rise in unemployment. There are especially acute problems for young people looking for their first job. Putting the Minimum wage up at the same time as the big tax rise exacerbated the problem, leading more employers to cut back on recruitment or to slim their workforces down. The catering and hospitality sector was particularly hard hit, and shops also suffered another blow to their chances of survival. The addition of big rises in business rates, against the government promise of helping pubs and High Street shops, was another unexpected hit when they had been promised rates reform to lower their bills.
The language Labour used in its Manifesto to avoid tax rises on working people and to boost living standards has been blown away by a run of anti growth tax rises, managed price rises, and the overriding policy of dear energy to speed net zero. Many more people are now on benefits, and many more young people are not in training, education or work. The government struggles to define a working person, and finds plenty of people to tax more that look like working people to the rest of us. The Chancellor says she is concentrating on getting the cost of living under control, yet she grants large wage rises to a wide range of public sector activities and allows through rises in energy prices, rail fares, Council tax bills and other public sector activities.
As Labour criticise their leader and examine other options, their attention goes to things that will make the situation worse. Every deal with the EU entails paying the EU more money for no advantage, leading to yet higher taxes. The Erasmus deal costs far too much and will if like the last time we were in it pay for more EU students to come here than it will help UK students to go abroad. The idea of joining the Customs Union would mean putting many more tariffs back on imports to the UK, pushing up prices and making UK business less competitive with dearer imported raw materials and components. They have given far too much of our fish away for 12 more years, preventing the good growth of our local fishing industry. They have still not lifted the ban on getting our own oil and gas out of the ground, which bring us more tax revenue and well paid jobs. They still are wedded to closing down all our petrol and diesel car plants by 2030, which means more closures and job losses soon.
To get the econo0my growing again, to help create more jobs, to get the numbers on benefits coming down will take more than a small tax cut on family farms, welcome though that is. They must reverse many of their bans that stop us making and growing things here. They must bring down the costs of employing people, especially young people, by cutting their Jobs tax. They need to review taxation of small businesses generally and create a better climate to encourage new and growing businesses to stay and flourish here.
The government has carried out one sensible U turn on its farms policy. It says it wants to get back to growth, to controlling the cost of living and to encouraging investment. To do that it needs more U turns on its tax rising agenda. It needs to grapple more successfully with runaway public sector costs. it needs to concentrate on getting many more people back to work, whilst issuing fewer sicknotes for life.
December 27, 2025
Indeed and they also did the same for small unquoted trading companies (no U-turn on AIM shares). Note however that in order to pay a 20% inheritance tax on a farm or a business you will almost certainly have to either take dividends out of the business or farm paying 25% Corp. Tax on profits then the dividend tax and then the 20% so the total tax is far higher. Or by selling part of the farm or company possible incurring CGT. To pay say £10m in IHT on a business assets of say £12.5 m you might well end up having to pay more like £25m in all the taxes.
This might well be 25 years of income from a business or even more for businesses like farms that make low profits. Or perhaps borrow it which just defers the problem but makes it larger as you also have to find the interest and fees.
December 27, 2025
Sir James Dyson:- “Companies are valued on a multiple of their earnings,” he said. “So if you’re paying 40 per cent of a multiple of your earnings, that’s billions in my case. We haven’t got billions of cash… so you have to sell the business to pay it.
“A company has no value. There’s no assets that you can sell. Its value is a multiple of its profits. So it’s paper money. You simply don’t have [it].”
Indeed and with IHT, CGT, Corp. tax, dividend tax it can well be far more than 40% – even if the IHT itself is only 20%.
Sensible countries charge no IHT as it destroys most incentives to invest or build businesses or create jobs in the UK. The government are already taking 25% of profits in CT, then about 50% of the payroll is tax and NI, then perhaps 10%+ of turnover goes in VAT often other taxes too car taxes, fuel, energy, net zero taxes, landfill… Who owns this business? You or the state? The state is likely to be getting far more out of the business than the owners perhaps as much as 10 times as much.
December 27, 2025
Ms Reeves and Labour will rapidly find out that taking say 25% from businesses and workers will give you a far higher tax take than killing and deterring businesses and growth by taxing them at the far higher rates she is pushing and this is on top of the Net Zero rip off energy lunacy, the insane worker right and employment laws and endless other red tape and compliance costs! This especially when UK government spend and waste money so appallingly often doing huge net harms with it!
Not that the top medium/long term tax take (Laffer Point) should even be the goal, that is far too high for the maximum good of the people and country!
December 27, 2025
LL,
It’s The Gangster State.
December 27, 2025
Anarcho-tyranny – a system of government that combines oppressive power, taxation and mugging against law-abiding citizens with a simultaneous failure to enforce basic laws against actual real criminals.
December 27, 2025
The last Tory government was absolutely awful but this current Labour one is so much worse. How can a government have got so much so wrong in such a short time? How can the UK survive another three-and-a-half years of such bad governance? We cannot trust a single word that any government minister, especially the Prime Minister, says because they lie and they find lying so easy to do.
One such lie is that they have ‘reinstated’ the Winter Fuel Allowance (WFA) when in fact they have done no such thing. They have partially reinstated it. A pensioner couple I know got WFA of £250 each in 2023. They got nothing last year after Reeves’ cruel withholding of it, and this year that same couple got £100 each so that is hardly ‘reinstating’ it. Reinstating it would have meant giving them £250 each, not the £100 they actually received, which left them £300 short to pay their ever-rising bills. Energy prices keep going up – mainly thanks to the net zero nonsense – yet pensioners dipped out completely last year and got less than half this year. I don’t even call that a U-turn. I call it seeing just how little in the way of helping its indigenous population an incompetent government can get away with while still financing its favourite causes like foreign aid, like the accommodating and supporting of illegal migrants, like encouraging big families to have even more children that will be a drain on all our public services, like net zero, like supporting Ukraine indefinitely without discussing bringing that war to an end, like funding the vast salaries and expenses of MPs, like funding an unwanted and unwarranted return to the EU, and so on and so on. The list of things this government is wasting our hard-earned taxes on gets longer and longer.
I worry that the U-turn on IHT for family farms will be treated in the same disingenuous way so that it won’t be exactly what it says it will be – the lifting of the risk of IHT on farms under a certain value. It will be worded as a saviour of small family farms but that will be the last thing it turns out to be and, of course, the threat of IHT on them for the last sixteen months will have caused some of them utter devastation and heartbreak.
I ask again, how can a government have got it so wrong in so short a time and, a more pertinent question, how can we rid ourselves of it before it does even more damage? The prospect of the next three-and-a-half years under this current bunch of incompetents terrifies me.
December 27, 2025
Kathy, the government has got nothing wrong, it’d deliberately spiteful against anyone they perceive not to be a liebour supporter.
Following the WEF playbook which 2TK is a cheerleader for means stripping all personal wealth from the population and redistribution to their chosen cohort.
41,000 mainly young men have crossed the channel this year to date. This is an invasion by hostile people but the government does nothing to stop it. It must be government policy. Thousands on student or work visas are claiming asylum. It should be a condition of entry that no one on a visa can claim asylum but no, that’s too easy.
We are being deliberately displaced to the point of bankruptcy and the country is simmering.
There appears to be endless funds to cater for this invasion and this pile of excrement will do nothing to stop it.
December 27, 2025
You are too kind to Starmer and Co., they have not got it wrong in their eyes, in fact they have not ‘gone wrong’ enough yet – more wrongness is on the way. Starmer believes he is doing everything right, we just need to believe in his socialist dream and we’ll all feel happy and warm….
December 27, 2025
“more moves to lower taxes” you say but this is just making a vast proposed tax increase slightly better! Not really lowering taxes but reducing a vast proposed tax grab and asset theft.
What matters is to reduce government expenditure hugely and to make sure what they do spend it spend effectively. Alas this government and the last wasted billions much of it spent doing net harm. Net harm Covid “vaccines”, Covid lockdowns, Net ZERO war on plant food, PPE scandals, payment to augment the benefit feckless, low skilled net cost immigration, the Chagos lunacy, HS2, the war on private schools (with will damage education and cost more than it raises), the pushing of EVs and “renewables” with subsidies, rigged markets and tax breaks, burning wood (young coal) at DRAX, our dire defence procurement, DEI, diversity appointments, the dire structure of the NHS…
December 27, 2025
The £2.5M limit will doubtless be frozen so it is inflated away (a process that the appalling Osborne started). He promised £1M each nearly 20 year back but he and the Con Socialists ratted on this and kept the threshold at £325K (now worth more like £200K). So we now have IHT at 40% (or sometimes 20%) above threshold of £325K, £650K for a couple, £1m if you have a residence you can pass down to children or grandchildren, £2.5m if you have an unquoted business or farm land or £5M for a couple. What a complete dogs breakfast. All taxes should try to be fiscally neutral so as not to rig markets. Unless there are very good reasons to rig them, perhaps (for example) anti-smoking or other anti-drug taxes! Though even these just tend just to increase the black market, smuggling or just switch people to illegal drugs!
December 27, 2025
Several decades of Governmental and Local Government tax and anti-car policies, along with the growth of online purchasing, have effectively killed the High Street. We were told that the replacement to the traditional retailers would be cafes, restaurants and services – turning High Streets into centres for socialising.
So first of all the Uni-Party hammered pubs and cafes with the Covid Tyranny. Then Theeves decided to clobber those which had managed to survive with massively hiked taxes, including NI and an increase in the minimum wage.
On Christmas Eve, three more retailers in my local small market town put up the Closing Down signs and most people no longer have much disposable income for regular socialising in pubs, cafes and restaurants, so they will be next.
Most employees in these sectors are women and young people – those most likely to vote Labour. I guess we just have to hope that they are learning the lesson because the Labour Party NEVER does.
December 27, 2025
You use many words, while I would state that this government is financially illiterate.
They spend money on projects and people who will show them no profit while setting out to destroy all those family businesses and SMEs that are the positive element of the UK economy.
On top of this incompetence they are the most demoralising influence on those who cannot escape their negativity. Roll on the day when the money lenders tire of their inane proflegacy.
December 27, 2025
Good morning
In short, the Labour Party has to become more conservative.
What tipsy-topsy world we live in.
Of course the Labour backbenches will never allow it not while they believe that there are enough people with wealth to rinse out.
December 27, 2025
The small U turn that Labour have finally done, was only after lots of pressure from farmers out on the streets regularly with their tractors. The U turn would have never happened otherwise!
December 27, 2025
I agree. IHT is an evil tax that forces unwelcome decisions and financial gambles on elderly people who have made responsible & prudent savings during their working lives. IHT must be scrapped all together.
December 27, 2025
Pure greed on behalf of government to claim tax on monies passed down through generations.
Again ut is the middle classes most affected. How much did Ed Miliband’s family pay. How about the Lord who died a while back worth £4 billion.
Tax, as ever is paid by those who don’t gave enough to pay advisers.
Spend less, tax less.
December 27, 2025
The move we need is to a different but sensible government.
December 27, 2025
So essentially, Labour are financially incompetent and are trashing the economy. Who’d a thought it ……