Collectively, these associations represent more than 160,000 family businesses, who warn that the changes to agricultural property relief and business property relief announced in the Autumn Budget will have ‘a severe and long-lasting impact on these businesses and the livelihoods of the millions of people they employ’.
In the open letter, published by Family Business UK, leaders warned that the policy changes will ‘starve’ these businesses and the economy of much-needed investment, ‘leading to forced, premature business sales and the loss of jobs in constituencies across the country’.
They add that BPR and APR ‘are not loopholes’ but measures that exist to ‘allow profitable businesses to continue trading, without penalty, when the owner dies’.
Economic impact analysis commissioned by FBUK and produced by CBI Economics has revealed that between 2026/7 – 2029/30 the changes to BPR could reduce economic activity by £9.4bn, lead to more than 125,000 job losses – including among the SMEs the government is trying to support and protect – and result in a net fiscal loss to the Exchequer of £1.25bn.
The NFU’s own impact analysis, produced in consultation with former Treasury and Office for Budget Responsibility economists, found that 75% of commercial family farms will be above the £1m threshold.
NFU President Tom Bradshaw said the Family Business UK letter further showed just how poorly thought through the inheritance tax changes were. He said: “As a signatory of the letter, alongside 31 other trade organisations representing the industry and associated businesses, we strongly echo the sentiment that the proposed tax could have far reaching consequences for the broader economy, employment and public finances.
“No one thinks this is a good policy, not even the government’s own advisers. It’s time for Treasury to listen to farmers and the multiple other organisations calling for these proposals to be opened up for consultation.”
CEO of Family Business UK Neil Davy said: “The model of family business ownership is unique. It powers the entire economy from farming to finance and everything in between. This letter, and those who have chosen to sign it, are testament to just how widespread family ownership is, and how committed we are to speak up on behalf of our members.
“Already, family business owners are taking decisions to withhold planned investments and are putting recruitment on hold.”
According to CBI Economics, family businesses mitigating the cost of a potential future Inheritance Tax bill would be most likely to reduce investment and employment leading to an:
- average reduction in investment of 16.5%
- average reduction in headcount of 10.2%
- average loss of turnover of 7.4%.
