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Inheritance tax changes will have a seismic impact for Northern Ireland businesses

Posted By:
Grant Thornton Advisors (NI) LLP

30th Oct 2024

Statement in response to the Chancellor’s 2024 Autumn Budget

In response to the Chancellor’s 2024 Autumn Budget, Alan Gourley, Partner at leading business advisory firm Grant Thornton Northern Ireland, said:

“Many employers throughout Northern Ireland will be dismayed by the Autumn Budget, with the increase in the rate of employers’ National Insurance, the reduction in the threshold to which the rate applies, and the increase in the national living wage set to significantly hit the bottom line for a lot of companies.

“Perhaps even more alarming, however, is the seismic impact that the changes to inheritance tax will have on a lot of family businesses. Indeed, Northern Ireland has such a strong culture of retaining companies within the family that these changes will affect this region more than most.

“The tweaks to a few lesser-known rules, such as the reform of both business relief and the ability to pass on agricultural land tax-free, mean businesses need to deal with a major extra exposure to tax.

“On a more positive note, there is something of a reprieve for Capital Gains Tax, which has increased slightly but not to the levels that had been predicted during much of the pre-Budget commentary and analysis.

“From a wider economic view, the Labour Party’s ambition was to restore economic credibility and boost public services without a return to austerity. While a lot of what was announced had been expected, I don’t think anyone predicted that current year borrowing would be as high as £127bn. 

“The Office for Budget Responsibility (OBR) had its full allocation of time to assess the content, and its response is that the economy is going to grow slightly faster than previously predicted, meaning the measures that have been taken in this Budget are going to add to economic growth, which was a major concern pre-Budget.

“From a Northern Ireland economy perspective, the unpausing of the Growth Deals in the the Mid South West and Causeway Coast and Glens areas is to be warmly welcomed. The £1.5bn that has been earmarked for the Stormont Executive will go a long way towards addressing the public sector spending crisis that has gripped the region for so long – the big challenge now is for the Executive to make sure it is spent wisely.”