Report showcases the 'devastating effect' the Autumn budget will have on family business
One local business owner says its harder to be proud their business when constantly cutting costs.
A study which is being hailed as the 'most comprehensive ever' into the impact of proposed changes on family-owned business has revealed 'devastating' results
Family Businesses UK are predicting 208,000 predicted job losses, £15 billion less economic activity (GVA) and £1.9 billion net fiscal loss for government
The report, from Family Business UK (FBUK), supported by 32 trade associations, and conducted by CBI Economics, reveals that every sector of the economy and every region of the UK will be hit as family businesses and farms cut jobs and investment.
The Government’s Autumn Budget in 2024 introduced changes to Inheritance Tax in how Business Property Relief (BPR) and Agricultural Property Relief (APR) will be applied to family-owned enterprises from April 2026.
FBUK and 32 trade associations are calling for urgent government consultation to reverse or amend the policy while there is time, and before too many permanent decisions are taken by family businesses on cutting jobs and investment.
We spoke with Tammy Woodhouse is the Director of Millbrook Garden Company, in Staplehurst and Gravesend.
She told us the amount of challenged being faced by her family-ran garden centres
"Looking economically, people are still feeling the squeeze and price increases
"There is a lot of pressure on small businesses"
When speaking about her business, Tammy said:
"Garden centres are really good at adapting, becoming less weather dependant, opening cafe's, doing Christmas
"As a family business, we've always invested in the future. It just makes it harder to be proud of the business when you're always having to cut costs.
"It does have an impact on how good you can be as a business
"It's really hard to find ways of being profitable
The report went on to say:
In the absence of any Government economic impact assessment or risk analysis of this policy change, FBUK, supported by independent trade associations representing every sector of the UK economy, has sought to fill that gap by researching 4,200 family businesses and farms across the whole of the country.
The CBI Economics data is damning, predicting that the reforms could threaten over 200,000 jobs and cut almost £15bn in economic activity by the end of this Parliament.
And while the government says the changes will raise £1.4 billion over the term of this Parliament, the research shows the reduction in investment, economic activity and lower employment would have the opposite effect, producing a net fiscal loss to the government of £1.9 billion.
For family businesses and farms affected by changes to APR the findings show that investment will fall most in Northern Ireland and North East England (17.7%) while employment will fall most in the North East (12%) and North West England (10%).
In 2023, family businesses generated £985 billion in Gross Value Added (GVA), equivalent to 59% of the total private sector contribution, and it is estimated that family businesses contributed £422 billion of taxation to the UK Exchequer through tax receipts