Asked by: Joy Morrissey (Conservative - Beaconsfield)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether her Department has made an estimate of the number of family businesses that may be required to (a) sell and (b) downsize as a result of the reduction in Business Property Relief; and what assessment she has made of the potential impact of the behavioural responses on the public finances.
Answered by James Murray - Chief Secretary to the Treasury
The value of an ownership of a business, or share of a business, is included in an estate for inheritance tax purposes. Business property relief reduces the value of the interest in the business or its assets when calculating how much inheritance tax is due on the value of the estate.
Excluding claims by estates only holding shares designed as “not listed” on recognised stock exchanges, the Government has set out that around 500 estates claiming business property relief only in 2026-27 are expected to pay more inheritance tax as a result of the reforms announced at Autumn Budget 2024. Any potential impact on businesses will depend on the individual circumstances, including the size of the inheritance tax liability, the ownership structure, and the value of non-business assets in an estate available to pay a liability. Furthermore, where any inheritance tax is due, those liable for a charge can in most circumstances pay any liability on the relevant assets over 10 annual instalments, interest-free. The independent Office for Budget Responsibility (OBR) does not expect the reforms to have any significant macroeconomic impacts.
The behavioural impact of policies is accounted for in the normal way in the costings certified by the independent OBR. The OBR recently published more detail on the costings for the reforms to agricultural property relief and business property relief, including the potential behavioural responses, at https://obr.uk/download/october-2024-economic-and-fiscal-outlook-costing-of-changes-to-agricultural-and-business-property-relief/?tmstv=1739194105.
Asked by: Joy Morrissey (Conservative - Beaconsfield)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps he is taking to support bank branches at risk of closure during the covid-19 outbreak.
Answered by John Glen
Throughout the Covid-19 pandemic, the Government has worked closely with the financial regulators to ensure that banks, building societies, credit unions and the Post Office continue to maintain branch access for essential banking services while balancing the needs of their customers with the safety and welfare of staff. The vast majority of branches have remained open.
In the longer term, banking service providers will need to balance customer interests, market competition, and other commercial factors when considering its branch strategy. Decisions on opening and closing branches are taken by the management team of each bank on a commercial basis and the Government does not intervene in these decisions.
However, the Government also firmly believes that the impact of branch closures should be understood, considered, and mitigated where possible so that all customers, wherever they live, continue to have access to over the counter banking services.
Since May 2017, the major high street banks have signed up to the Access to Banking Standard, in which they commit to ensure customers are well informed about branch closures, the bank’s reasons for closure and options for continued access to banking services.
In September 2020, the Financial Conduct Authority (FCA) published guidance setting out their expectation of firms when they are deciding to reduce their physical branches or the number of free-to-use ATMs. Firms are expected to carefully consider the impact of a planned closure on their customers’ everyday banking and cash access needs, and other relevant branch services and consider possible alternative access arrangements. This will ensure the implementation of closure decisions is done in a way that treats customers fairly.
Alternative options for access might include the Post Office, where 95% of business and 99% of personal banking customers are able to carry out their everyday banking at over 11,500 Post Office branches across the UK.
Asked by: Joy Morrissey (Conservative - Beaconsfield)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether the Government plans to extend the Bounce Back Loan Scheme in response to the additional time businesses have been subject to covid-19 lockdown restrictions.
Answered by John Glen
The Government launched the Bounce Back Loan Scheme (BBLS) to ensure that the smallest businesses could access loans of up to £50,000 in a matter of just days. As of 15 November, the scheme had supported nearly 1.4 million businesses with facilities totaling over £42 billion.
Originally, the scheme was due to close to new loan applications on 4 November. However, this end date has already been extended twice; initially to 30 November and subsequently to the existing scheme end date of 31 January 2021. This extension ensures that businesses have more time to make loan applications, supporting them through the pandemic.
Furthermore, the Government is continuing to work with lenders and business representatives to introduce a new, successor loan guarantee scheme, set to begin once the existing guarantee schemes (BBLS, along with the Coronavirus Business Interruption Loan Scheme and Coronavirus Large Business Interruption Loan Scheme) close to new applications. More details around this new scheme will be released in due course.