ENTREPRENEUR Ryan Howsam, who grew up in a council house and now runs a £1.3billion business, has slammed Labour’s Budget as an ‘absolute disaster’ for small firms.

In an exclusive interview with The Sun, the insurance boss warned that Labour’s recent Budget will kill family businesses and force firms to cut wages.

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The founder and chairman of insurer Staysure blasted changes to inheritance tax, National Insurance and minimum wage.

Mr Howsam set up his first business at 19 and is now the chief executive of a major, family-run insurance company which employs over 700 people.

Family-run businesses form around 86% of the UK’s private sector, according to the Family Business Research Foundation, most of which are considered “small to medium” businesses (SMEs).

But several changes announced in the Budget last week were targeted at increasing costs for those firms, which Mr Howsam says will see more firms close and a loss of opportunities for everyone.

For example, he said the government’s increase to the Living and Minimum Wages by 6.7% and 16%, respectively, as well as employers’ National Insurance will mean firms have to cut wage growth.

Meanwhile, he said the changes to bring family business assets into the scope of inheritance tax (IHT) will force more family businesses to close, or their families will have to sell them at a reduced price to pay the tax bill.

“I don’t really think [the Budget] served lower-income households very well, as minimum wage growth and the National Insurance increase will hit businesses’ ability to grow, and that will ultimately mean there’s less wage growth and less opportunity,” he explained.

“And the changes to inheritance tax are an absolute disaster.

“I come from a council house background, so I’m as working class as you get and I understand people having less disposable income.

“But this narrative that Labour has got that we should hammer anybody who has got money and wants to succeed is like biting the hand that feeds you. Why would you do that?

“These are the people bringing the cash in and paying the majority of our tax.”

‘Changes to IHT will kill family businesses’

Changes to bring family businesses into the scope of inheritance tax (IHT) will mean families having to pay 20% tax on assets over £1million.

Previously, family businesses were exempt from IHT if left to a loved one.

But now this exemption will only apply to the first £1million of assets in the businesses, which Mr Howsam says means families will have to sell their busniess at a reduced price to pay the remaining tax bill.

“Most family businesses are not quoted on the stock market, which means HMRC will have to put an arbitrary value on them, and then the family has just got to come up with that money,” he explained.

“If you take a business valued at £4million, that business might only have £100,000 in the bank, but 20% of £4million (without business relief on the first £1million) is £800,000. Where are the family going to get £800,000 from, plus interest?

“They won’t – the only way the money will come in is it they sell the business for a lot less than it’s worth because they are desperate.

“So, these families have worked their whole lives, but they will be forced to sell the business or try to come up with an awful lot of money. It’s a really stupid move.”

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‘Targeting the wealthy will mean more tax for everyone’

Mr Howsam added that targeting wealth and businesses will ultimately end up increasing taxes for everyone if those people decide to leave the UK.

“Around 4,500 millionaires left the country last year, and this year it’s forecast to be 9,500 millionaires,” he said.

“You may think that doesn’t matter, but it does matter, because the top 1% of taxpayers pay 28% of HMRC‘s tax take – and then there’s the money they spend, which puts their tax take up to 36%.

“If those people leave, who do you think is going to have to pay more? The country is just getting less well off as a result.”

The government’s plan to also include pensions in the scope of IHT will also mean far more people end up paying the death tax, he said.

Currently, only around 4% of families pay IHT, but Mr Howsam says the changes in the Budget will trickle down and start hitting mid-to-low income families.

“IHT is going to hit middle income people in a big way, and then it’s going to start coming down towards lower-income people too, if they have a bigger pension pot,” he said.

Other announcements in the Budget

In the Budget last week, Labour announced a raft of measures to fill a £22billion “black hole” in the country’s finances allegedly left by the previous government.

A few of those measures included the changes to IHT, a crackdown on benefit fraud, a hike in tobacco duty and a stamp duty increase on second homes.

However, there was some good news for savers in the Budget.

Benefits like Universal Credit and Attendance Allowance will rise by 1.7% in line with September’s inflation figure. Ms Reeves also confirmed the state pension will rise by up to £473 next year.

The minimum wage is also set to rise for workers aged 21 and over by 6.7% from next April from £11.44 to £12.21.

We have rounded up legal ways to avoid inheritance tax here.

Asda has confirmed 475 roles at their head offices in Leeds and Leicestershire will be cut and hybrid working reduced as part of a business restructure.

The retailer said the move, which would affect less than 10% of its head office staff, would enable it to “simplify structures” amid a challenging market.

In a note to employees on Tuesday, the company’s chairman Lord Rose said office attendance would also become compulsory for at least three days per week from January.

It comes after the company reported a 2.2% decline in total revenues excluding fuel, to £5.3bn from April to June 2024.

A spokesperson for the firm said: “The changes which are being communicated today will result in 475 colleagues being made redundant at our head offices in Leeds and Leicestershire.

“In addition, fixed-term contractors who are working on our IT transformation project will also leave over the course of the next few months as this project finishes.”

From January 2025, employees would also be required to be present in an Asda office location for a minimum of three days per week.

Lord Rose said the changes were needed to “ensure that the business was best placed to meet our long-term ambitions”.

“As part of this process, we are redefining roles and accountabilities to remove duplication and simplify structures,” he said.

Asda was bought in 2020 from Walmart by billionaire brothers Zuber and Mohsin Issa in a £6.8bn deal with the backing of equity firm TDR Capital.

Last week, Asda announced TDR Capital had acquired the shares of Zuber Issa, who subsequently stepped down from his non-executive role on Asda’s board.

This brings the ownership of Asda by TDR Capital to 67.5%.

Mohsin Issa, who stepped back from his executive leadership role in September, owns 22.5 %, while 10% is still held by Walmart.

Listen to highlights from West Yorkshire on BBC Sounds, catch up with the latest episode of Look North or tell us a story you think we should be covering here.

A MAJOR bank is gearing up to launch a brand new “buy now, pay later” product to rival the likes of Klarna, ClearPay and PayPal.

Lloyds Bank is creating its own “split payments” option that will allow its customers to spread the cost of items and services bought online over time, The Sun understands.

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The product will be fully regulated by the Financial Conduct Authority (FCA), which most buy now, pay later (BNPL) products currently aren’t, but will be by 2026 under plans by the government.

It is understood the product will be an entirely new and independent payment option that will appear at checkouts like Klarna or ClearPay and won’t be linked to existing products like credit cards.

In some cases, it may be offered as an exclusive split payment option for its 27million customers, while at other merchants it will appear alongside other similar payment options.

Lloyds will also launch a dedicated mobile app for the product where users will be able to see all of their instalment plans in one place.

While Lloyds could not confirm exact timings, it is understood the product could be available from as early as next year.

It will only be available with a small number of merchants initially and will then roll out more widely, with the long-term goal being to “show up at the end of millions of online purchase journeys”.

The focus will be on targeting merchants that offer goods and services where it makes sense to spread payments.

It is not currently known whether the product will charge any extra fees or what the interest rate will be, but Lloyds said it will update The Sun when it has more details to share.

Lloyds is creating the product following feedback from customers that they wanted more payment options when buying online.

Lloyds has also reported seeing an increase in customers choosing to spread their payments over time, which has led to it wanting to create its own offering.

It is understood that the bank is currently recruiting extra staff internally to help with the rollout of the product, and is working with New Day, the firm behind the John Lewis Partnership Card.

The plans follow the launch of US BNPL brand Affirm in the uK earlier this week. It will let users pay in instalments such as six, nine or 12 months and will not charge any extra fees.

They also come after a recent announcement from the government to pass legislation to regulate the buy now, pay later (BNPL) sector by early next year, with regulation in place by 2026, as revealed exclusively by The Sun.

The new rules will mean BNPL users will get extra protections when using the products, including Section 75 protection and the ability to complain to the Financial Ombudsman if things go wrong.

It’s important to make sure you can afford to meet any payments before taking out an instalment plan to avoid damaging your credit score or ending up with any late fees.

The history of banks and BNPL products

Lloyds Bank is not the first lender to venture into the BNPL space.

Rival high street bank NatWest has previously had its own BNPL product, which was available for its 18million customers – although was used by far fewer.

NatWest launched the product, which allowed customers to spread purchases over four interest-free monthly instalments, to much fanfare in summer 2022, saying it had seen “clear demand” for BNPL.

But the bank axed the product on May 7 last year after seeing far lower take-up than expected.

Credit card provider American Express also launched its own BNPL option, “Plan It”, in February this year.

The option allows customers to spread payments over three, six or 12 months interest-free with a fixed monthly fee.

Usually with a credit card you pay off the full balance each month at no extra cost, or make the minimum repayment and pay interest. But Plan It means they can extend the interest-free period for a small fee.

For example, repaying £1,000 over six months would come with a £10.70 monthly fee – so £64.20 overall – while borrowing with 30% interest would cost £95.79 per month.

Credit card need-to-knows

Not using a credit card effectively can wreak havoc on your finances and your credit score.

If you don’t keep up with repayments or default on your debt, you are likely to get a black mark on your credit record, which could affect your ability to get a credit card, loan or mortgage in the future.

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It’s important not to let yourself get sucked into overspending.

You should always clear the full balance as soon as possible.

If you have a poor credit score, don’t bank on being approved for a card or getting the 0% deal you’d hoped for.

Card providers only have to give the advertised rate to 51% of applicants, so you could end up paying more interest than you bargained for.

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If you’ve got a poor credit record, you’re less likely to get the best rates.

And if you are looking for a new credit card, don’t apply for lots at once.

After your 0% period is up, lenders can charge upwards of 40% interest, so if you have not repaid the debt fully by then, try to move the debt onto another 0% deal.

What are the BNPL regulation changes?

The Labour government confirmed last month that it intends to legislate to bring BNPL products under the FCA’s rule by early 2025, which would mean regulation would kick in by 2026.

Plans to regulate these products have been repeatedly delayed, which is bad news for shoppers as no regulation means customers aren’t protected if things go wrong.

Under the plans, firms will have to be clear and transparent about late fees and how they could impact customers’ credit ratings.

Affordability checks will also be strengthened and shoppers who feel they’ve been treated unfairly will be able to complain to the Financial Ombudsman Service (FOS), which resolves disputes with financial firms.

These products will also be subject to the Consumer Credit Act and Section 75, so shoppers will be able to complain if products are falsely advertised and can get their money back if items are faulty.

Some split payment products are already regulated. For example, Zilch, which is considered a BNPL firm, is already under FCA regulation.

Do you have a money problem that needs sorting? Get in touch by emailing squeezeteam@thesun.co.uk