Collectively, these associations represent more than 160,000 family businesses and warn that the changes to APR (agricultural property relief) and BPR (business property relief) announced in the Autumn Budget will have 鈥榓 severe and long-lasting impact on these businesses and the livelihoods of the millions of people they employ鈥�.
In the , published on Monday 16 December by FBUK (Family Business UK), leaders warned that the policy changes will 鈥榮tarve鈥� these businesses and the economy of much-needed investment, 鈥榣eading to forced, premature business sales and the loss of jobs in constituencies across the country鈥�.
They add that BPR and APR 鈥榓re not loopholes鈥� but measures that exist to 鈥榓llow profitable businesses to continue trading, without penalty, when the owner dies鈥�.
Modelling predicts 拢1.25bn loss to Treasury
Economic impact analysis commissioned by FBUK and produced by CBI Economics has revealed that between 2026/7 鈥� 2029/30 the changes to BPR could reduce economic activity (GVA) by 拢9.4bn, lead to more than 125,000 job losses 鈥� including among the SMEs the government is trying to support and protect 鈥� and result in a net fiscal loss to the Exchequer of 拢1.25bn.聽
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 拢1m threshold.
Even if we consider an optimistic 拢2m threshold before the tax takes effect, for many medium-sized farms inheritance tax bills spread over 10 years would wipe out the majority of their returns.
Read: An impact analysis of APR reforms on commercial family farms.
鈥�It鈥檚 time for Treasury to listen to farmers and the multiple other organisations calling for these proposals to be opened up for consultation.鈥�
NFU President Tom Bradshaw
Poorly thought out policy
NFU President Tom Bradshaw said the Family Business UK letter 鈥渇urther shows just how poorly thought through the inheritance tax changes are鈥�.
He added: 鈥淎s 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.
鈥淣o one thinks this is a good policy, not even the government鈥檚 own advisers. It鈥檚 time for Treasury to listen to farmers and the multiple other organisations calling for these proposals to be opened up for consultation.鈥�
CEO of Family Business UK Neil Davy said: 鈥淭he 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.
鈥淎lready, family business owners are taking decisions to withhold planned investments and are putting recruitment on hold.鈥�
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%.
The letter comes as the NFU begins the next phase of its campaign to stop the family farm tax, with banners delivering this key message to government beginning to populate the UK鈥檚 major highways.
