Business: Inheritance Tax and Living Wage
The question
To ask the Chancellor of the Exchequer, what steps her Department plans to take to support family owned small and medium sized enterprises with changes in the level of (a) the National Living Wage and (b) Business Property Relief.
Answered by James Murray
At Autumn Budget, the Government took a number of difficult but necessary decisions on tax, welfare, and spending to restore economic stability, fix the public finances, and support public services. These were tough decisions given the situation we inherited from the previous administration, but the Government has done so in a way that makes the tax system fairer and more sustainable.
Specifically to support small and medium businesses, including family businesses, the Budget announced generous tax reforms including more than doubling the employment allowance to £10,500, maintaining the Small Profits Rate and marginal relief at their current rates and thresholds, maintaining the Annual Investment Allowance, and freezing the small businesses multiplier for 2025-26.
The government has protected smaller family businesses from BPR changes, providing a very significant level of relief with the first £1 million of business assets continuing to receive 100% relief and then 50% thereafter.
Each year, the independent Low Pay Commission produces recommendations to the Government on the National Living Wage rates. At Autumn Budget, the Government accepted the LPC’s recommendations on the rates in full, meaning that NLW rate will rise to £12.21 per hour from April 2025.
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