BUSINESS HELPDESK HELP DESK


REPRESENTING YOUR INTERESTS


John Newcomb, Chief Executive, BMF outlines the value of the trade body’s political representation


COMPANIES JOIN THE BMF for many different reasons. Some relish the networking opportunities, others the training. Increasingly, since the covid pandemic, they are citing our political representation as one of the main reasons for joining. Representing members’ views to government throughout the pandemic contributed to the implementation of a number of changes that helped merchants continue to operate during those strange and uncertain times. Ensuring the voice of our members is heard is one of seven key initiatives embedded into the BMF strategy, and one that we take very seriously. In recent weeks, I have taken more calls than ever before on a single subject that has raised alarm bells across the building materials sector; the changes to Inheritance Tax announced by the Chancellor in the Autumn Budget. The Chancellor appeared to think their effect would be limited to a small number of farmers. It is now clear that capping the application of Business Property Relief on Inheritance Tax will affect thousands of private and family run companies in every sector. Many to such an extent that they may well lose the businesses they have taken decades to build up.


Is this really what the government intended? In removing Business Property Relief (BPR), the current Labour Chancellor is overturning a principle that was introduced by a former Labour Chancellor in the 1970s. Denis Healey deliberately chose to help “the small businessman transferring his business over a period to his successors” by reducing


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inheritance tax on their assts. The tax relief was further expanded in the 1990s, but the principle has been in place for over 50 years and has protected many private, family-owned companies from being sold or broken up to pay Inheritance Tax.


Seventy-five percent of companies in BMF membership have a turnover of less than £12.5 million. Many of them are family-owned businesses that have taken decades to build up, often over several generations. They are rightly concerned about the impact of the proposed changes on their daily operations and the long-term consequences for their future trading prospects. Most will have to take a dividend from the company to cover the Inheritance Tax resulting in a double tax bill, far higher than the new BPR rate of 20% claimed at the time of the budget. All of which will create economic instability, cause financial insecurity and add to the day-to-


day difficulties of running a family business


The BMF has been swift to act on their behalf


We have a duty to be a critical friend of government if we can see that a particular action will create more problems than it solves. The government was elected on a programme of investment and growth. The unintended consequences of this particular tax change may well curtail this laudable aim. There is no shame in government taking a second look to iron out inconsistences and wrongful assumptions - to strike an equitable balance between wealth- creating, risk-taking employers and providing public services. Construction is critical to the UK economy and the government has stated its determination to build 1.5 million new homes over the next five years. This requires a strong and stable building materials supply chain,


which could be put at risk if the companies manufacturing and supplying these materials struggle to justify investment.


We have written to the Prime Minister, the Chancellor and the Secretary of State for Business and Trade, expressing our concerns, providing detailed real-life examples of the impact of the proposed changes on both merchant and supplier members, and pressing for a ministerial meeting to discuss ideas from affected business owners in person.


The BMF ends 2024 with over one thousand companies in membership. We are the fourth largest trade body in the construction industry. We are dedicated to using our strength and influence to represent the building materials sector at the highest levels. BMJ


• Visit www.bmf.org.uk to discover the breadth of its support for members, and how to join.


www.buildersmerchantsjournal.net December 2024


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