Family Business UK has called on Prime Minister Andy Burnham to reverse inheritance tax changes affecting family-owned businesses and farms.
The campaign group is urging the Government to scrap the 20 per cent inheritance tax charge introduced under former Chancellor Rachel Reeves and commit to no further tax rises on business ownership, succession or investment.
Family Business UK (FBUK) said capital gains tax and corporation tax are among the areas causing concern for business owners.
Research commissioned by the organisation found around half of Britain’s family-run businesses want the new Government to prioritise improving business confidence, increasing investment and supporting employment.
FBUK said many firms believe the inheritance tax changes risk undermining long-term investment and succession planning.
The group’s findings also show that more than half of family businesses remain affected by the inheritance tax reforms, with the impact increasing for firms employing more than 50 people.
Business leaders are calling on the Government to provide certainty by ruling out further tax increases affecting business ownership, succession and investment.
The organisation said family firms have faced prolonged uncertainty over tax policy during the past two years.
FBUK argued that Labour’s 2024 election pledge to be the most business-friendly Government in memory has yet to be reflected in business confidence.
Neil Davy, chief executive of Family Business UK, said: “With his pledge to be a pro-business leader, the first 100 days in office offer the new Prime Minister a golden opportunity to embrace the power and scale of Britain’s family business sector and give firms confidence to invest and grow for the future.”
Mr Davy described the inheritance tax changes as “an existential threat” to five million British businesses.
He said family-owned firms now face a future inheritance tax liability that many non-family-owned and overseas-owned competitors do not.
Mr Davy added: “These two steps would give family business owners renewed confidence that this administration is prepared to work with, and not against them.”
He said changes to Business Property Relief and Agricultural Property Relief had forced some businesses to rethink long-term investment plans.
Mr Davy also called on the Government to place greater emphasis on supporting medium-sized family businesses.
He said around 10,000 scale-up family businesses contribute more than £140billion to the UK economy and employ almost one million people.
According to FBUK, encouraging growth among those firms could increase investment, employment and tax revenues.
Mr Davy also said family businesses play an important role in supporting local communities and high streets because of their long-term approach to investment and employment.
The organisation said it wants the Government to provide greater certainty over future tax policy as businesses plan for long-term growth.
