Month: October 2025

Family Business UK (FBUK) Chairman Steve Rigby has warned Peers that proposed inheritance tax reforms risk creating the “worst of all worlds” for family firms, stalling investment, halting growth and undermining confidence across the UK economy. 

The warning was made as Steve gave evidence to the House of Lords Finance Bill Sub-Committee, which is inquiring into proposed changes to inheritance tax relief for family business owners, as part of its scrutiny of the Finance Bill. 

FBUK has warned of the widespread unintended consequences of the policy, due to be implemented in April 2026, saying it will stifle investment, growth and employment opportunities across the UK’s family business sector. 

In his evidence to the committee, Steve Rigby cited data from FBUK’s Taxing Futures research, telling Peers that the proposed reforms are having a chilling effect on the UK economy. 

He said the reforms could lead to 208,000 full-time job losses, a £15 billion reduction in gross value added (GVA), and a net fiscal loss of almost £2 billion during the remainder of this Parliament. 

“We are in the worst of all worlds at this moment,” Steve told the committee. “Businesses are disincentivised to grow, owners are worried and uncertainty is causing businesses to delay investment or make rash decisions about their future.” 

Peers heard how FBUK had put forward several constructive alternatives to mitigate the policy’s impact and was hopeful that Treasury would consider them.  

In particular, Steve cited proposals to allow the business itself to assume the inheritance tax liability, rather than the individual, a “zero-sum change” that would preserve Treasury revenues while protecting business continuity. 

Steve criticised the aggressive timetable for implementation, adding that the measures had been announced without consultation and without proper consideration of the impacts of the changes, despite FBUK providing the only credible assessment of the measures to the Treasury.  

He warned the reforms could force many owners, particularly those with elderly majority shareholders, to make immediate and material decisions affecting the future of their business. 

Furthermore, Steve raised serious concerns about the practicality of achieving fair valuations under the new regime, questioning whether HMRC has sufficient capacity to manage the additional complexity. 

He was joined by Natalie Butt, Director at Crowe UK LLP, and James Brougham, Senior Economist at Make UK, during the session that focused on Business Property Relief within the Finance Bill. 

A second panel later in the afternoon examined Agricultural Property Relief and featured Tom Bradshaw, President of the National Farmers Union; Jeremy Moody, Secretary and Adviser at the Central Association of Agricultural Valuers; and Judicaelle Hammond, Director of Policy & Advice at the Country Land and Business Association. 

Freeing small and mid-sized firms from unnecessary reporting requirements is something we have been calling on the Government to do for several years, so it’s fantastic to see action on the issue.   

Today’s announcement from the Department for Business and Trade and HM Treasury reflects many of the points we raised in the Non-Financial Reporting Review, including simplifying thresholds, cutting duplication and easing pressure on family-owned firms. 

Family businesses value transparency and accountability. But as we’ve consistently highlighted, more reporting doesn’t always mean more transparency. Overloading stakeholders with information can make it harder to see what really matters. 

We’re pleased that government has listened and is focusing on ensuring reporting is proportionate, meaningful and accessible, so the right people get the right information in the right way. 

We look forward to contributing to the next phase of the review, helping to shape a system that supports sustainable growth and long-term value creation. 

Have your say: Government is inviting businesses to share examples of regulation that are not fit for purpose or that hold back growth, innovation, and investment. We encourage all family businesses to take part in the survey at the following link and will be doing so ourselves. 

www.gov.uk/government/calls-for-evidence/unlocking-business-reform-driven-by-you 

Family Business UK has called on the Government to pause the proposed changes to BPR and APR and warned against any further business-targeted tax increases that will undermine investment and stifle growth.

In its Budget submission, FBUK has repeated its appeal for the Government to consult on the changes to inheritance tax for family businesses and find a route forward that reduces the impact on family and farming businesses.

Research published by FBUK this year shows the changes to BPR and APR could lead to more than 208,000 job losses during the term of this Parliament, reduce economic activity by almost £15 billion and government tax receipts by £1.9 billion.

Against this backdrop, FBUK says:

It is untenable to contemplate further business-targeted tax rises. A broad wealth tax, or new restrictions on dividend taxation that penalise owner-managers, would have a similar effect. Business wealth is not an untapped source of government revenue; it is the working capital of firms. Taxing it aggressively forces asset sales, undermines investment and destroys the very businesses that generate jobs and taxes.

Elsewhere FBUK’s budget submission calls on the Government to:

• commit to a strategy to support mid-sized firms in unlocking long-term, sustainable growth across the whole of the UK.
• put family firms at the heart of the devolution mission, working in partnership with them to deliver local investment and growth
• work with FBUK to deliver tailored advice and support to family businesses, to help them take advantage of new export opportunities and drive growth.
• ensure export support and finance is better targeted to support family firms take their first steps into export
• reintroduce VAT free shopping for international visitors
• take the macroeconomic family business situation into account when assessing the Low Pay Commission’s advice on the NLW and NMW rates to come into effect in April 2026.

Fiona Graham, Chief Operating Officer at FBUK said:

We are absolutely clear that any further business-targeted tax increases in this Budget, will only serve to undermine investment and stifle growth.

Changes to the rules on inheritance tax for family businesses, announced last year, have been hugely damaging to our members and the entire family business community. But there is still time to pause and consult, and for government to work with us to find a better solution that supports Britain’s family businesses.

We would encourage the Government to use next month’s Budget to prioritise growth-friendly policies that support family businesses to do what they do best – create growth and prosperity in every region of the UK and maximise new opportunities in markets around the world.

Read FBUKs full budget submission.

Image: William – stock.adobe.com

Family Business UK has reiterated its concerns over the changes to Business Property Relief (BPR) and Agricultural Property Relief (APR), warning of the consequences of the proposed policy changes on investment, succession planning, and the long-term success of family-owned enterprises.

In evidence submitted to the House of Lords Finance Bill Sub-Committee, FBUK warns that the policy reforms risk undermining Britain’s family business sector with many firms still ill-prepared for the policy change.

In its submission FBUK warns:

• the policy risks having a chilling effect on the UK economy – which could result in 208,000 full-time jobs lost, a near £15billion reduction in GVA and a net fiscal loss to Government of almost £2bn in this Parliament.
• of serious concerns around valuations and capacity within HMRC
• the 6-month window for reporting and paying IHT is unrealistic for family businesses committed to long-term investments – creating a liquidity crisis among family firms
• the timetable for implementing the reforms is too aggressive and lacks the necessary transitional provisions to protect family businesses.

Matt Jaffa, Policy and Public Affairs Director at FBUK said:

We have grave concerns about the changes to this pivotal policy for family businesses, and the speed with which the Government plans to implement them.

Family business often need years, not months, to rearrange their affairs. Implementing these policy changes in April 2026 creates a cliff-edge for family-owned firms and has enormous implications for the decisions they are being forced to take.

Outside of a technical consultation on Trusts, the wider reforms to BPR and APR were announced without any meaningful engagement with family business owners leading to widespread confusion, anxiety and mistrust.

A transparent and inclusive consultation process is now essential to ensure that tax policy supports – not undermines – the long-term success of family businesses. So, we are calling on the Chancellor to meet with us, our Members and stakeholders and co-design a policy that balances fiscal responsibility with economic sustainability.

FBUK Members can read our full submission to the House of Lords Sub-Committee in the Policy area of our website.