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With political party conference season upon us and the Tories scrambling for ways to appeal to voters and lessen Labour’s lead in the polls, abolishing inheritance tax has again been floated as the next government giveaway.

So, how many people are paying inheritance tax and how much are they paying: will abolition allow grieving loved ones to save thousands or is this a boon to the homeowning Tory base?

Or is this just a sensible policy measure benefitting both groups, given house prices are still more expensive than they were before the pandemic and inflation stood for months in double digit territory?

With widespread dislike of inheritance tax, the incorrect belief among taxpayers that they’ll fork out because of the toll, calls for abolition and reform coming from all corners, yet only small percentages of assets being affected by the charge, Prime Minister Rishi Sunak may have landed on a policy that few would miss in its current form.

It is after all what Tories call the “most hated tax”.

While only a small percent pay inheritance tax, new data from the Institute for economic research, Fiscal Studies (IFS) says the sums could be significant to some: if all non-spousal inheritances transferred next year were equally shared between all 25 years olds, each would receive around £120,000.

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The prime minister refused to comment on inheritance tax “speculation”.

How many are paying?

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Latest available figures from the tax man, His Majesty’s Revenue and Customs (HMRC), show 27,000 estates paid inheritance tax in the year 2020 to 2021. An estate encompasses a person’s assets: their house, any jewellery or other valuables they might own. Though inheritance tax isn’t paid on pension and insurance money.

For context, more than half a million (577,160) people died in England and Wales in 2022.

Essentially, less than 4% (3.73%) of estates paid inheritance tax in the 2020 to 2021 year.

And the number of estates paying inheritance tax is up by 4,000 people since the previous tax year, 2019 to 2020, as the numbers of people who died increased during the COVID-19 pandemic.

What are they paying?

At present, inheritance tax is charged at 40% and applies to estates worth more than £325,000. There are, however, allowances that can mean its only paid on more valuable estates.

If a main residence is being passed to children or grandchildren a £175,000 allowance is added, meaning only amounts of £500,000 are subject to inheritance tax. Married couples can share that allowance, doubling it and allowing a £1m estate to be passed on to children tax free.

Sunak is said to be looking at reducing the levy in the budget in March, working towards an eventual abolition.

Official HMRC statistics show £5.76bn of inheritance tax liabilities were racked up in the 2020 to 2021 tax year. This was higher than usual – to the tune of £800m, a 16% increase – as COVID-19 caused a greater number of deaths that year.

This year more than £3bn has been generated in just four months, provisional HMRC figures showed, and June broke the monthly record.

While new highs of inheritance tax are coming in, other forms of wealth tax, like capital gains tax (CGT) – the levy on things like income from a second property or shares – are also reaching new highs, greater than inheritance tax.

CGT added £16.7bn to the public purse in the 2021 to 2022 tax year and came from 94,000 taxpayers, HMRC said.

Meanwhile the inheritance tax take from April to August this year was £3.2bn, £300m higher than in the same period a year earlier as asset values have increased and rate rises meaning more interest is charged on late payments to HMRC.

It is worth noting that tax receipts are up across the board. This is not unique to inheritance tax.

A combination of higher wages and more expensive goods (again, due to inflation) meant income tax, national insurance and capital gains tax yields were up. Overall HMRC said £19.8bn more was taken in from April to August this year than last, adding up to a total of £331.1bn.

The cost of abolition is £7bn, according to analysis from the IFS.

Who’s paying?

Notionally people passing on estates worth more than £500,000 would pay, but the figures demonstrate only a smaller number of people, in practise, do.

In theory, rich people’s estates should be inheritance taxed but there are ways around paying. People with legal or tax advisers can limit their liability.

For example, gifts of up to £3,000 in value can be given tax free. This may be possible for (and benefit) a wealthier person giving away collectors items but not a middle income earner passing on the family home.

But commentators say the exchequer could get even more from inheritance tax soon.

Research from investment service provider, Wealth Club, says the number of people paying inheritance could rise by 50% in a decade and £9bn could be yielded by 2029.

“The combination of rising house prices and inflation will push up both the number of families paying inheritance tax and the amount they pay”, said Nicholas Hyett, Investment Manager at Wealth Club.

The IFS goes one further in its new analysis and says around £15bn could be gathered from inheritance tax in a decade’s time.

Who would benefit from inheritance tax cuts?

People who may not think of themselves as wealthy, have come in scope of inheritance tax. These people could benefit as house prices have grown and the recent inflation cycle brought prices up.

Inheritance tax bands have been frozen since 2009 and they’re not due to be revised until 2028 even though most prices haven’t stayed at 2009 levels.

Those who didn’t have a spouse to share tax credits with or who do not wish to pass their estate to a child or grandchild, missing out on the exemptions in the process, are the kinds of people in line to benefit.

Research by the IFS says around half (47%) of the benefit of banning inheritance tax would go to those with estates of £2.1m or more, who represent the top 1% of estates.

That group would benefit from an average tax cut of around £1.1m, IFS figures show. The vast majority (roughly 90%) of estates not paying inheritance tax would not be directly affected by the ban.

Who would not benefit, according to the IFS, are people without assets. By the time inheritances arrive, the think tanks says, wealth inequalities are already well entrenched and hard to undo.

In other words, unless you already have rich parents, inheritance tax isn’t much good to you.

The question of whether binning this policy is designed to benefit people like Rishi Sunak, who are wealthy, depends on what the tax is replaced with, or not.

Why might it be in line for the scrap heap?

Inheritance tax is widely disliked.

Despite the data showing less than 4% of estates end up paying the levy, the public believe they’ll be affected, according to YouGov polling done for The Times.

Nearly a third (31%) of survey participants thought their assets will be valuable enough to pay inheritance tax and 15% thought they themselves would have to pay the tax on things they inherit.

Just 5% said the threshold for inheritance tax was £1m.

That’s not to mention the objections of politicians. It’s not the first time the Conservatives have tried to scrap the toll. Not three months have passed since the last time Tories flew this particular policy kite.

Labour in recent days have been staunch in their opposition to getting rid of inheritance tax but only because it is an unfunded tax cut.

Even left leaning think tank, the Resolution Foundation, and the IFS, want the tax gone.

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What’s happening with inheritance tax?

Alternatives

Both the Resolution Foundation and the IFS have ideas about what should fill its place.

For its part the Resolution Foundation proposes a lifetime allowance for everyone. Each person can inherit up to £125,000 over the course of their life and after that you should pay a tax rate of 20% on what you get for anything up to £500,000, for anything higher than half a million received after the £125,000 cut off, a tax rate of 30% should be applied.

Gifts and assets transferred between spouses should be exempt, the foundation proposes.

The financial benefits would better than inheritance tax as it currently stands, according to analysis the think tank has done: £5bn more could be collected a year, compared to the amount gathered in the 2020 to 2021 year. That would equate to tax revenues of £11bn.

Another positive, the Resolution Foundation says, is everyone has a lifetime benefit and so wealth is more likely to be spread around, among families for instance.

A further option, proposed by the Wealth Club, is to keep the tax as is but just raise the points at which you’re taxed in line with inflation.

Either way, voters are unlikely to hear an announcement on the tax future until Sunak’s Tory Party conference speech in early October or the government’s autumn statement in November.

Sources have told Sky News that, despite reports, no changes will be made this year.

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AstraZeneca exit is a frightening prospect for the City and the government

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AstraZeneca exit is a frightening prospect for the City and the government

It’s a threat that will send a shiver down the spine of Downing Street and shake the City of London to its core.

Even the notion that AstraZeneca (AZ) – the UK’s most valuable listed company – is thinking of upping sticks and switching its stock market listing to America is a frightening prospect on many levels.

After all, if your biggest firm departs for Wall Street, what message does it send to an already bruised London stock market that has struggled to find its way since the UK’s vote to leave the European Union?

Money latest: Cash in your pocket set to change

The timing of the report in The Times that Pascal Soriot, the pharmaceutical company’s long-standing chief executive, is considering his own Brexit for the company, will not be lost on anyone.

The Treasury is under severe strain and the Starmer government, apparently focused on compromise given its welfare reform U-turns, bruised.

Ministers have been scrambling to get the support of business back, after a budget tax raid that has added to the cost of employing people in the UK, by launching a series of strategies to demonstrate a growth-led focus.

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Mr Soriot’s reported shift is the culmination of years of frustration over UK tax rates and support for business – though it could also remove a focus on his own remuneration as the highest-paid director of a UK-listed firm.

Astrazeneca Boss Pascal Soriot
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Pascal Soriot has run AZ since 2012

AZ has its own gripes with Labour.

In January, the company cancelled a planned £450m investment in a vaccine factory on Merseyside, accusing the government of reneging on the previous Conservative administration’s offer of financial aid.

At the same time, it has been rebuilding its presence in the United States.

That speaks to not only a home market snub but also the election of a US president intent on protecting, as he sees it, America-based companies and jobs.

Donald Trump is threatening 25% tariffs on all pharma imports.

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How Trump’s tariffs are biting

AZ has already promised a $3.5bn (£2.6bn) investment in US manufacturing by the end of 2026.

It has also rejoined the leading US drug lobby group, bolstering its voice in Washington DC.

There are sound reasons for bolstering its US footprint; more than 40% of AZ’s revenues are made in the world’s largest economy. Greater US production would also shield it from any duties imposed by Mr Trump and any MAGA successor.

Since Brexit, complaints among UK stock market constituents have been of low valuations compared to peers (with a weak pound also leaving them vulnerable to takeovers), weaker access to capital and poor appetite for new listings.

Wise, the money transfer firm, became the latest UK name to say that it intends to move its primary listing to the US just last month.

Pic: Europa Press via AP
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Shein had been exploring a London flotation until it was blocked. Pic: Europa Press via AP

If followed through, it would tread in the footsteps of Flutter Entertainment and the building equipment suppler CRH – just two big names to have already left.

London was snubbed for a listing by its former chip-designing resident ARM back in 2023.

An initial public offering by Shein, the controversial fast fashion firm, had offered the prospect of the biggest flotation for the UK in many years but that was blocked by the Chinese authorities.

Efforts to bolster the City’s appeal, such as through the Financial Conduct Authority’s overhaul of listing rules and the creation of pension megafunds to aid access to capital, have also been boosted in recent months by investors in US companies taking a second look at comparatively low valuations in Europe.

Market analysts have charted a cash spread away from the US as a hedge against an erratic White House.

The Times report suggested that Mr Soriot’s plans were likely to face some opposition from members of the board, in addition to the UK government.

Pic: itock
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The City of London has faced a series of challenges since Brexit Pic: iStock

AstraZeneca has not commented on the story. Crucially, it did not deny it.

But a government spokesperson said: “Through our forthcoming Life Sciences Sector Plan, we are launching a 10-year mission to harness the life sciences sector to drive long-term economic growth and build a stronger, prevention-focused NHS.

“We have already started delivering on key actions, from investing up to £600m in the Health Data Research Service alongside Wellcome, through to committing over £650m in Genomics England and up to £354m in Our Future Health.

“This is clear evidence of our commitment and confidence in life sciences as a driver of both economic growth and better health outcomes.”

Governments don’t comment on stories such as these, but you can bet your bottom dollar that the departure of your biggest firm by market value is not the message a government laser-focused on growth can afford to allow.

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‘Catastrophic failure’ led to Heathrow power outage – with chances missed to prevent it

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'Catastrophic failure' led to Heathrow power outage - with chances missed to prevent it

A power outage that shut Heathrow Airport earlier this year, causing travel chaos for more than 270,000 passengers, was caused by a “catastrophic failure” of equipment in a nearby substation, according to a new report.

Experts say the fire at the North Hyde Substation, which supplies electricity to Heathrow, started following the failure of a high-voltage electrical insulator known as a bushing, before spreading.

The failure was “most likely” caused by moisture entering the equipment, according to the report.

Photo taken with permission from the social media site X, formerly Twitter, posted by @JoselynEMuirhe1 of the fire at Hayes electrical substation. More than 1,300 flights to and from Heathrow Airport will be disrupted on Friday due to the closure of the airport following the fire. Issue date: Friday March 21, 2025.
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The fire at Hayes electrical substation, which led to Heathrow Airport shutting down in March. Pic: @JoselynEMuirhe1/PA

National Grid, which owns the substation, missed two opportunities to prevent the failure, experts found, the first in 2018 when a higher-than-expected level of moisture was found in oil samples.

Such a reading meant “an imminent fault and that the bushing should be replaced”, according to guidance by the National Grid Electricity Transmission.

However, the report by National Energy System Operator (NESO) said the appropriate responses to such a serious issue were “not actioned”, including in 2022 when basic maintenance was postponed.

“The issue therefore went unaddressed,” the report added.

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Moment Heathrow substation ignites

The design and configuration of the airport’s internal power network meant the loss of just one of its three supply points would “result in the loss of power to operationally critical systems, leading to a suspension of operations for a significant period”, the report added.

Heathrow – which is Europe’s biggest airport – closed for around 16 hours on 21 March following the fire, before reopening at about 6pm.

Around 1,300 flights were cancelled and more than 270,000 air passenger journeys were disrupted.

The North Hyde electrical substation which caught fire. More than 1,300 flights to and from Heathrow Airport will be disrupted on Friday due to the closure of the airport following the fire. Picture date: Friday March 21, 2025.
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The North Hyde electrical substation which caught fire. File pic: PA

Tens of millions of pounds were lost, thousands of passengers were stranded, and questions were raised about the resilience of the UK’s infrastructure.

More than 71,000 domestic and commercial customers lost power as a result of the fire and the resulting power outage, the report said.

NESO chief executive, Fintan Slye, said there “wasn’t the control within their [National Grid’s] asset management systems that identified that this [elevated moisture levels] got missed.

“They identified a fault, [but] for some reason the transformer didn’t immediately get pulled out of service and get repaired.

Smoke rises from a fire at the North Hyde Electricity Substation.
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Smoke rises following the fire

“There was no control within the system that looked back and said ‘oh, hang on a second, you forgot to do this thing over here’.”

Sky’s science and technology editor, Tom Clarke, pointed to the age of the substation’s equipment, saying “some of these things are getting really very old now, coming to the end of their natural lives, and this is an illustration of what can happen if they are not really well maintained”.

The report also highlights a lack of joined-up thinking, he said, as “grid operators don’t know who’s critical national infrastructure on the network, and they don’t have priority”.

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Heathrow bosses were ‘warned about substation’

Responding to the report’s findings, a Heathrow spokesperson said: “A combination of outdated regulation, inadequate safety mechanisms, and National Grid’s failure to maintain its infrastructure led to this catastrophic power outage.

“We expect National Grid to be carefully considering what steps they can take to ensure this isn’t repeated.

“Our own Review, led by former Cabinet Minister Ruth Kelly, identified key areas for improvement and work is already underway to implement all 28 recommendations.”

In May, Ms Kelly’s investigation revealed that the airport’s chief executive couldn’t be contacted as the crisis unfolded because his phone was on silent.

Stranded passengers at Heathrow Terminal 5.
Pic: PA
Image:
Stranded passengers at Heathrow Terminal 5 following the fire
Pic: PA

Energy Secretary Ed Miliband, who commissioned the NESO report, called it “deeply concerning”, because “known risks were not addressed by the National Grid Electricity Transmission”.

Mr Miliband said energy regulator Ofgem, which opened an investigation on Wednesday after the report was published, is investigating “possible licence breaches relating to the development and maintenance of its electricity system at North Hyde.

“There are wider lessons to be learned from this incident. My department, working across government, will urgently consider the findings and recommendations set out by NESO and publish a response to the report in due course.”

National Grid said in a statement it has “a comprehensive asset inspection and maintenance programme in place” and said it has “taken further action since the fire”.

This includes “an end-to-end review” of its oil sampling process and results, further enhancement of fire risk assessments at all operational sites, and “re-testing the resilience of substations that serve strategic infrastructure”.

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A spokesperson said: “We fully support the recommendations in the report and are committed to working with NESO and others to implement them. We will also cooperate closely with Ofgem’s investigation.

“There are important lessons to be learnt about cross sector resilience and the need for increased coordination, and we look forward to working with government, regulators and industry partners to take these recommendations forward.”

The Metropolitan Police previously confirmed on 25 March that officers had “found no evidence to suggest that the incident was suspicious in nature”.

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UK content creators demand formal recognition from the government

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UK content creators demand formal recognition from the government

The UK’s YouTubers, TikTok creators and Instagram influencers have been surveyed on mass for the first time ever, and are demanding formal recognition from the government.

The creator economy in the UK is thought to employ around 45,000 people and contribute over £2bn to the country in one year alone, according to the new research by YouTube and Public First.

But, despite all that value, its workers say they feel underappreciated by the authorities.

Max Klyemenko, famous for his Career Ladder videos, wants the government to take creators like himself more seriously. Pic: Youtube
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Max Klyemenko, famous for his Career Ladder videos, wants the government to take creators like himself more seriously. Pic: Youtube

“If you look at the viewership, our channel is not too different from a big media company,” said Max Klymenko, a content creator with more than 10 million subscribers and half a billion monthly views on average.

“If you look at the relevancy, especially among young audiences, I will say that we are more relevant. That said, we don’t really get the same treatment,” he told Sky News.

Fifty-six per cent of the more than 10,000 creators surveyed said they do not think UK creators have a “voice in shaping government policies” that affect them.

Only 7% think they get enough support to access finance, while just 17% think there is enough training and skills development here in the UK.

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Nearly half think their value is not recognised by the broader creative industry.

The creative industries minister, Sir Chris Bryant, said the government “firmly recognises the integral role that creators play” in the UK’s creative industries and the fact that they help “to drive billions into the economy” and support more than 45,000 jobs.

“We understand more can be done to help creators reach their full potential, which is why we are backing them through our new Creative Industries Sector Plan,” he said.

Ben Woods said the government needs to "broaden its lens" to include creators
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Ben Woods said the government needs to “broaden its lens” to include creators

“The UK has got a fantastic history of supporting the creative industries,” said Ben Woods, a creator economy analyst, Midia Research who was not involved in the report.

“Whether you look at the film side, lots of blockbuster films are being shot here, or television, which is making waves on the global stage.

“But perhaps the government needs to broaden that lens a little bit to look at just what’s going on within the creator economy as well, because it is highly valuable, it’s where younger audiences are spending a lot of their time and [the UK is] really good at it.”

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According to YouTube, formal recognition would mean creators are factored into official economic impact data reporting, are represented on government creative bodies, and receive creator-specific guidance from HMRC on taxes and finances.

For some, financial guidance and clarity would be invaluable; the ‘creator’ job title seems to cause problems when applying for mortgages or bank loans.

Podcaster David Brown owns a recording studio for creators
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Podcaster David Brown owns a recording studio for creators

“It’s really difficult as a freelancer to get things like mortgages and bank accounts and credit and those types of things,” said podcaster David Brown, who owns a recording studio for creators.

“A lot of people make very good money doing it,” he told Sky News.

“They’re very well supported. They have a lot of cash flow, and they are successful at doing that job. It’s just the way society and banking and everything is set up. It makes it really difficult.”

The creative industries minister said he is committed to appointing a creative freelance champion and increasing support from the British Business Bank in order to “help creators thrive and drive even more growth in the sector”.

The government has already pledged to boost the UK’s creative industries, launching a plan to make the UK the number one destination for creative investment and promising an extra £14bn to the sector by 2035.

These influencers want to make sure they are recognised as part of that.

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