Chancellor urged to reverse or pause damaging BPR reforms
FBUK says Autumn Budget ideal time to rethink
Warns against further business-focused tax rises
New data from FBUK shows 65% of family firms say higher costs including employment and energy are barrier to investment and growth below
Press Release
Family Business UK is urging the Treasury to use next week’s Budget to pause or reverse planned changes to inheritance tax, announced in last year’s Budget, and consult on workable alternatives to power growth.
The organisation, which represents family businesses employing almost half a million people, says that by persisting with the proposed changes to Business Property Relief (‘BPR’) and Agricultural Property Relief (‘APR’), the Government is pursuing a policy that harms jobs, weakens growth and could lower tax revenues.
Independent research commissioned by FBUK, and published this year, shows that the changes to BPR and APR could see more than 208,000 job losses by the end of this Parliament, cut economic activity by almost £15 billion and result in a net fiscal loss of £1.9 billion.
In addition, new research commissioned by FBUK, and due to be published next year, shows that while most family firms aim to grow in 2026 almost two thirds (65%) say higher costs of employment and raw materials costs are acting as a barrier to growth. More than half of family businesses (57%) are also held back by the on-going impact of high energy prices.
Against this backdrop FBUK says it would be untenable for government to contemplate further business-targeted tax increases in next week’s Budget. Instead, it is urging government to focus on big revenue raisers like National Insurance and Income Tax rather than opting for a smorgasbord of small changes which have the potential to do lasting economic damage.
Fiona Graham, COO Family Business UK, said:
“From the beginning, this Government has promised that economic growth is its number one mission. There isn’t a single business in the country that wouldn’t support that. But if the changes to BPR and APR go ahead unchanged, then family business owners and the tens of millions of people they employ will feel let down.
“All business needs a supportive policy landscape to have the confidence to invest for the future. Higher employment and energy costs are clearly acting as a drag on growth. Family businesses face the additional challenge of Inheritance Tax. No other model of business has been singled out in this way and it has, unsurprisingly, sapped their confidence to make the long-term investments their business and this country needs.
“We have spent the last year asking government to pause this policy change and consult on workable alternatives that support growth and the model of family ownership. There is still time, and this Budget offers the perfect opportunity to announce a rethink.”
Gary Dawson, Chairman AV Dawson Group, an 80 year-old family business which owns and operates the Port of Middlesbrough, located within Teesside Freeport the UK’s largest freeport, said:
“Family businesses like ours play a vital role in driving investment and creating much-needed skilled jobs in Teesside. We reinvest all profits locally, support apprenticeships and help sustain the wider supply chain that underpins our regional economy. The proposed changes to inheritance tax reliefs risk undermining that stability and confidence at a time when businesses are already facing significant cost pressures.”
“These reliefs are not loopholes, they are essential tools that allow us to continue investing in people and infrastructure and plan for succession. We need policies that encourage investment, continuity and long-term thinking, not measures that make it harder to plan for the future. Pausing these reforms would be a welcome signal that the Government understands the realities facing family firms up and down the country as well as their importance in delivering growth.”
FBUK is publishing its Budget submission ahead of Family Business Week, which starts on Monday (24 Nov), to celebrate the contribution family businesses make to the economy and communities up and down the country.
During the week, FBUK will also be running campaigns and workshops to support family firms to take their first steps to trading internationally. Across the UK, almost 280,000 businesses export goods or services to more than 200 countries in trade worth £838 Billion. But this means that just 11.5% of UK firms are exporting, offering enormous potential for growth.
Fiona Graham, COO of Family Business UK, says:
“Family businesses are the rock on which our economy, and communities thrive. Given a supportive policy environment, they can also power UK economic growth on an international stage.
“Thousands of family businesses already trade internationally including large firms like Walker’s Shortbread. But small and mid-sized family firms are also successfully exporting including Gerald McDonald Group, Healeys Cyder and Viridian Nutrition.
“Family Business Week is about demonstrating to government that by working with the rich diversity of family-owned businesses right across this country, they can be the key to unlocking growth.
“Family businesses are unique in their long-term approach to investment and growth. They have been building Britain for generations and it’s a privilege to celebrate their achievements and successes during Family Business Week.”