The trade association backs cross-industry campaign calling for formal consultation on Inheritance Tax and Business Property Relief.
The Builders Merchants Federation is backing an open letter co-ordinated by Family Business UK, which has been sent to the Chancellor calling for a formal consultation on Business Property Relief and Agricultural Property Relief.
John Newcomb, CEO of the BMF, is one of 32 signatories to the open letter. Five other construction bodies are also signatories to the letter – British Coatings Federation, Construction Plant-Hire Association, Electrical Contractors Association, Home Builders Federation and Commercial Interiors UK. In total 32 trade and industry bodies that collectively represent 160,000 UK family firms and farms have added their support to the letter.
The BMF, which represents the UK’s building materials sector, believes the planned change to inheritance tax will have a profound impact on enterprise, and potential knock-on effect on the nation’s ability to build homes.
Independent economic modelling commissioned by Family Business UK and conducted by CBI Economics suggests that far from raising revenue, the changes to BPR alone could result in a £1.25 billion net fiscal loss to the Exchequer, lead to more than 125,000 job losses and reduce economic activity by £9.4 billion over the course of the Parliament.
The Family Business UK letter to the Chancellor and press release, as well as a copy of the CBI-Economics report commissioned by Family Business UK .
The BMF’s letter to the PM (sent on 28 November) reveals its concerns on the issue. As well as writing to the PM, the BMF has also written to the Chancellor and the Secretary of State for Business and Trade, to reflect the gravity of the situation it says could have serious consequences for the entire building materials’ supply sector.
Two recent press releases from the BMF, outlining concerns about the planned tax changes, including quotes from members. (Nick Howarth of Howarth Timber, Yorkshire and David Berry of C&W Berry in Lancashire)
In the BMF press releases, Newcomb said: “Construction is absolutely critical to the lifeblood of the UK economy, but we are hearing across the industry that the changes in inheritance taxation could limit the future of the sector, with many private and family businesses across our membership reporting back that the impact of Business Property Relief will damage enterprise.
“Most BMF members are now reviewing their sales and trading forecasts for the next two years and looking at investment decisions, stock levels and staffing numbers.
“Early indications are that the proposed changes to Business Property Relief pose significant concerns to family-owned businesses.
“We suspect owners may choose to defer or cut back on investing in or expanding their operations in the near term, in areas such as upgrading production lines, replacing plant and machinery, adding to product ranges, opening new branches, or taking on more staff, especially apprentices.
“This is a retrograde step for each company, and our supply chain, as it diverts money away from operational needs.”