The homeowners of tens of hundreds of family-run companies and farms have urged Chancellor Rachel Reeves to revisit the inheritance tax adjustments introduced in her latest Funds, warning they may set off pressured gross sales, job losses, and a marked discount in funding.
In an open letter despatched over the weekend, Household Enterprise UK—representing 32 commerce associations and about 160,000 household enterprises—known as on Reeves to seek the advice of extra broadly and think about the longer-term fallout of the brand new measures.
These adjustments, set to take impact from August 2026, tighten inheritance tax reduction in order that household companies passing on greater than £1 million of property will face a 20 per cent levy. The Workplace for Funds Duty estimates this can increase £520 million by 2029-30. Nevertheless, Household Enterprise UK argues the measures may result in a £1.25 billion web fiscal loss attributable to diminished exercise and job cuts.
Neil Davy, the organisation’s chief government, described the reforms as a “hammer blow” to enterprises that always kind the spine of native economies. “In many cases, heirs may have no option but to sell up rather than continue running the business,” he mentioned. “This risks driving valuable British assets and family farms into the hands of overseas buyers who pay little to no tax here.”
The letter additionally famous that some household enterprise homeowners have postponed funding and frozen recruitment, as employees develop anxious about future impacts on their livelihoods.
Household Enterprise UK is looking on the Chancellor to provoke a proper session on the coverage, in search of a constructive answer that preserves the long-term pursuits of those enterprises and the roles and funding they assist.
Whereas Labour maintains it should restore public funds after inheriting a multibillion-pound funding hole from the earlier authorities, the letter’s signatories insist that tax reforms shouldn’t come on the expense of Britain’s family-owned economic system.
