Credit, Collections & Insolvency News
An overwhelming majority of mid-sized business owners are planning to help the next generation tackle the financial impact of Covid-19, according to new research released by BDO
The findings from accountancy and advisory firm reveal that more than eight in ten (82%) of business owners are mindful of ‘intergenerational fairness’ and in favour of helping the next generation financially. However, respondents are divided in their views on how best to assist.
Almost half (45%) of business owners surveyed are planning to provide assistance in the form of a loan or gift to help their children start a business or enable a career change.
Meanwhile, over a quarter (37%) revealed they would be prepared to give or lend money to allow their children to secure their foot on the property ladder.
Almost one fifth (16%) of respondents stated they have no plans to financially assist the younger generations of their family.
Paul Falvey, Tax Partner at BDO, said “Our research appears to show that the majority of business leaders appreciate the financial challenges facing the younger generations. With the cost of living increasing and property prices continuing to rise in many parts of the UK, the older generations appear keen to reduce their descendants’ financial burden where they can.”
“It is important that the tax system adapts in order to help ‘intergenerational fairness’ come to fruition. For example, the inheritance tax rules, reviewed many times, have not changed in decades, but are ripe for reform.”
“It is pleasing to see that almost half of respondents appear to be keen to encourage the younger generations to be entrepreneurially spirited by helping start new businesses. Investing in the growth of new businesses will be essential for the economy’s post-Covid-19 recovery but should be done cautiously given the financial risk of new venture involvement.”
