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“These reforms are flawed in design, rushed in process, and unfairly target small and medium-sized family businesses. Without changes, many operators will be forced to sell assets in weak markets, with devastating consequences for jobs, investment and communities.
The principle behind Business Property Relief was to safeguard family-run businesses, but these changes sadly do the opposite. I urge the Government to think again and reconsider these reforms.” – Kate Nicholls, Chair
Inheritance tax changes could force family-owned hospitality businesses to sell up, threatening jobs and local economies
We have called on the Government to reconsider proposed reforms to Inheritance Tax that could devastate family-run hospitality businesses across the UK, in both its Budget submission and evidence to the House of Lords Economic Affairs Finance Bill Sub-Committee inquiry on the issue.
The trade body warns that changes to Business Property Relief (BPR) risk forcing the sale of viable businesses, undermining generational succession, weakening rural and coastal economies, and reducing reinvestment and long-term tax receipts.
Recent member survey data reveals that 47% of family-owned hospitality businesses expect to be directly affected, with 51% cutting back investment and a fifth anticipating being forced to sell up.
We are calling for:
- A pause and extension of consultation with full sector engagement
- A delay to implementation until at least 2029
- Preservation of the principles behind APR and BPR to safeguard productive capital and generational continuity
Read how this is affecting the industry
Simon Collinson, Director of Oak Taverns Ltd, said:
Our business was set up in 1991 and is still currently owned by our parents, both now in their eighties. It is now operated by a second generation of me, my brother and sister.
We have invested heavily in freehold pubs over the years on mostly closed, failing and under threat pubs in villages and small market towns. We have given back communities their local pub and created jobs in the process. Following the new IHT rules, the focus is no longer on growth but trying to decide which of our great pubs we will have to sell to pay the tax bill.
No one ever bought a small- or medium-sized pub company to avoid inheritance tax by passing it down to another generation. We would urge the government to reconsider its reforms to BPR which would be devasting for many family-run hospitality businesses.
Elyse Waddy, Owner and Director of The Empire Hotel, Llandudno, said:
This policy ripped my heart out – all my life I have worked with the goals of preserving and improving my family business to pass on to the next generation. Now that is all for nothing.
Why did I invest, cherish and sweat for it to be stolen from me just because I will have the misfortune to die.
I have been a good employer and looked after my staff, supported local suppliers and tradesmen, helped the local community and paid all my taxes so in essence did all that was asked but my business will cease when I die. I will not allow the business to continue with that tax debt around its neck as it is just not a sustainable option.
Paul Milsom, Managing Director of Milsom Hotels & Restaurants, said:
I believe the government’s approach is incredibly short-sighted. While we understand the need for increased revenue, to put the viability of good family businesses at risk across the country is not the answer.
This policy could lead to businesses being sold off to less committed investors or even collapsing, ultimately resulting in job losses and less tax revenue in the long run. The government really needs to rethink this and extend the consultation period to fully understand the economic impact.
As it stands, this move feels like it was made without proper research and could be deeply damaging to the backbone of British industry.
