Tag: Chancellor

Business groups unite behind FBUK call to reverse BPR changes

Posted on by Vanessa Barrett

Family Business UK has brought together leading business organisations representing more than 200,000 businesses to call on the Chancellor to reverse the changes to Business Property Relief at the Autumn Budget.

In an open letter to the Chancellor, organisations representing businesses across hospitality, retail, construction, agriculture, logistics, manufacturing and the rural economy have united behind our call to restore 100% BPR for qualifying family businesses.

The intervention comes as attention increasingly turns towards the Autumn Budget and the decisions the new Chancellor will take to support investment and growth.

Despite the Government’s decision to increase the 100% relief allowance to £2.5 million per estate, the fundamental problems with the policy remain. Family businesses continue to tell us that the changes are affecting investment, recruitment and long-term succession planning.

Our message to the Chancellor is clear: the Budget provides an opportunity to think again.

A united voice from across British business

The open letter brings together organisations including UKHospitality, the Country Land and Business Association, Build UK, the British Independent Retailers Association, Builders Merchants Federation, Historic Houses, the Holiday and Residential Parks Association, British Home Enhancement Trade Association, Agricultural Industries Confederation, Retail NI, Craft Bakers Association, Trade Association Forum and the Road Haulage Association.

Together, the signatories represent more than 200,000 businesses across the UK.

The breadth of organisations supporting the letter demonstrates that concern over the BPR changes extends far beyond any one sector. Businesses across the economy are warning that the reforms risk diverting money away from investment and jobs, disrupting succession and making long-established British businesses more vulnerable to sale.

As the Autumn Budget approaches, this collective voice strengthens the case we continue to make to Ministers, MPs and officials: family businesses should be encouraged to invest for the long term, not penalised for passing successful businesses from one generation to the next.

Read the open letter to the Chancellor here.

The case for change

The evidence of the economic consequences continues to grow.

Research commissioned by Family Business UK found that the originally proposed reforms could put 208,500 jobs at risk, reduce economic activity by £14.86 billion and result in a £1.87 billion net fiscal loss by the end of the current Parliament.

The case for change has been further strengthened by recent research from Make UK, highlighting the damaging impact the inheritance tax reforms are already having on family-owned manufacturers.

This reflects what we continue to hear directly from FBUK members about decisions being taken now as a consequence of the changes – from investment being delayed or cancelled to recruitment plans being reconsidered and succession strategies being revisited.

Neil Davy, Chief Executive of Family Business UK, said:

“The Chancellor has a choice in his first Budget: make it harder for British family businesses to invest, employ and pass their businesses on to the next generation by sticking with his predecessor’s reforms, or give them the confidence to get on with building the economy.

“The next Budget is an opportunity to reset the relationship between Government and family businesses. Reversing these changes would send a powerful message that Britain wants businesses to stay here, invest here and grow here – not become forced-sale opportunities for overseas buyers.”

Keeping up the pressure ahead of the Budget

Restoring 100% Business Property Relief remains a central priority for Family Business UK and is at the heart of our submission to the Chancellor ahead of the Autumn Budget.

Over the coming weeks, we will continue making that case across Government and Parliament, alongside our members and the wider coalition of business organisations supporting this campaign.

The Government has already demonstrated that it is prepared to reconsider elements of the policy. Our message now is that it should go further.

The Chancellor’s first Budget is an opportunity to provide family businesses with the certainty and confidence they need to invest, employ and grow for generations to come.

Budget Comment – Inheritance Tax Changes – Family Businesses

Posted on by Abbie-Louise

Budget Comment – Inheritance Tax Changes – Family Businesses

Immediate Release.

Neil Davy, Chief Executive Officer of Family Business UK said: “These changes are a betrayal of Britain’s hard working family business owners and farmers that will result in valuable businesses being closed, sold and jobs lost across the country. 

“For all but the very smallest companies the changes to Business Property Relief are much the same as scrapping it entirely. Far from raising money for the Exchequer our research has shown that removing the reliefs will cost money – with a £29billion cut in economic activity and 391,000 jobs lost. 

“On top of changes to Employer’s National Insurance, employment rights, and living wage, this is yet another burden heaped on Britain’s 4.8 million family owned businesses, and removes entirely any incentive for starting or running a family business. 

“Inheritance tax reliefs are not loopholes, they are legitimate tax policies, introduced by a Labour Government in 1976, to ensure that businesses do not have to be broken up on the death of the owner, to the detriment of all the remaining employees, suppliers, customers, investors, the Treasury and wider economy. 

“These changes effectively seize 20% of the capital of private trading companies saddling them with tax bills that, in most circumstances, cannot be met without selling the underlying business.

“Those inheriting a family business simply do not have 20% of the business value lying around in cash. This change will see a steady succession of family business sold or their underlying assets broken up to satisfy these ill-thought out policy changes.” 

ENDS.

Contact the Family Business UK Press Office here.

FBUK warns of Threat to Family Businesses

Posted on by Abbie-Louise

FBUK warns of Threat to Family Businesses

Family Business UK (FBUK)  has warned how a vocal minority of commentators risk undermining Britain’s family businesses in the run up the Budget on 30 October.

In a letter to the editor of The Daily Telegraph, FBUK CEO Neil Davy, urges the Government to speak directly to family business owners to understand the importance of supportive policies and how businesses can deliver the Government’s growth agenda.

Below is the full text of the letter.

Ill-informed commentary puts jobs and growth at risk.

Sir, the Government was always going to face difficult choices on tax. But, it must be wary of making policy decisions that penalise businesses based on seemingly unfounded opinion (“Reeves told to charge capital gains tax after death.” 9 September).

Britain’s 4.8 million family-owned businesses are a case in point. Supported by policies that allow them to thrive across generations, they employ half the UKs private sector workforce and contribute more than a quarter of government tax receipts.

Family businesses are well placed to support the Government’s growth agenda. But a vocal minority would have the Government pull the rug from under them, risking a significant loss of jobs in every constituency across the country, lower tax receipts and threatens the future of otherwise successful businesses.

Contrary to the views of a minority of commentators, Business Relief, or Business Property Relief (BPR) is not a loophole that protects the wealthy. Nor is it a policy that benefits the privileged few. It is a policy that underpins the very model of family business ownership, and successful multi-generational businesses.

It has been retained by successive governments for 50 years for the simple reason they understood it gives family business owners the confidence to make long-term investments in their business and the communities they serve.

Many of Britain’s biggest and best-known brands are highly successful multi-generation family businesses. Those who run them have every right to be angry and alarmed by the IFS’ suggestion that future generations are not quite up to the task, or that the ultimate goal of all private businesses – including family businesses – is to sell and cash-in.

On behalf of all family businesses, I urge the Chancellor and her advisers to ignore these voices and speak directly to the owners of the family businesses whose future risks being threatened by ill-informed voices, about how they can – and want to – support delivery of the growth, jobs, and opportunity your government has promised.

Neil Davy
CEO, Family Business UK.