Hands off the family firms keeping Britain working

Do not make family business succession a tax trap

Passing on a family business means handing over responsibility, livelihoods and years of hard work. Reports of another tax squeeze on succession will unsettle owners already juggling rising costs and uncertain demand. The Chancellor must consider what happens to jobs and investment when keeping a firm in the family becomes harder.

Hands Off Our Family Businesses

Raising taxes on family businesses when they are handed down is reported to be on the list of moves the Chancellor is reported to be considering according to City A.M. This is the latest in a flurry of pre-budget speculation and may come to nothing, but just in case that’s where the Treasury’s thinking is going the message has to be loud and clear.

These are vital businesses you’re messing with. The economy will suffer along with the firms that shut, are sold or broken up and jobs will be lost. Family firms aren’t loopholes or tax shelters, they don’t have deep pockets and they shouldn’t be political bargaining chips.

The move being suggested would hit the very firms keeping Britain’s high streets, local economies and communities alive. If it’s true, this is the moment for small and micro businesses to say to the Chancellor: “Hands off”.

Photo by Brett Jordan on Unsplash

Not a Soft Target

Family firms make up more than 8 in every 10 UK businesses. They employ millions, anchor local communities, and reinvest profits locally rather than offshore. They’re the businesses that keep our already struggling high streets breathing and stay rooted in local communities when the chains and big firms have made their money and move on.

They train apprentices and pass skills down the generations. They spend in every postcode and employ from every postcode. There’s not increase in productivity or growth without them. We’ve already had the revolt from the farmers over inheritance tax changes, and taxing them and their fellow family firms more, when they hand the business to the next generation, is economic self‑harm.

Succession Is Already Hard

Passing a business down isn’t a windfall. It’s a transfer of responsibility, risk and skills.

Family firms are already up to their eyes in rising costs and borrowing rates, energy and supply chain volatility, business rates pressure, recruitment challenges and compliance burdens. Adding a new tax hit at the moment of succession, risks pushing many families to opt out and take generations of skills and expertise with them.

The UK economy can’t afford to lose more small businesses along with the jobs they create, the skills they’ve amassed, and the community support and social value they donate.

More Not Fewer

The UK’s economic resilience depends on long‑term stewardship, patient capital and generational investment, local loyalty and stable employment. Family businesses deliver all of that, and short‑term tax grabs destroy it.

Support Them

If the government wants stronger high streets and growth in every postcode, as well as more apprenticeships and more young people in work, taxing family businesses more is the opposite of the right way to go about it. They have to be protected, not penalised:

Protect Business and Agricultural Property Relief

No new inheritance‑linked business taxes

A freeze or cut in business rates

Support for succession planning and

Incentives for investment and job creation.

Anything else undermines the firms Britain relies on.

Microbusinesses

Small firms with 0-9 employees, are the most vulnerable. They don’t have tax advisors and complex structures or big financial buffers. They have family savings, personal guarantees, local customers and thin margins. A tax rise at succession could force many to sell, close, or break up and the loss will be huge, locally and economically.

Vital Businesses

City A.M.’s report will worry every small and family‑run business in the UK. Just when we thought the Chancellor was looking at supporting small businesses with cuts in business rates (speculation until we hear it in the Budget speech) the latest speculation is a blow to confidence even if it does turn out to be a pre-budget kite flying myth.

We need to say ‘NO’ to raising taxes and ‘hands off family businesses and succession’. These are vital businesses you’re messing with and it’s the economy that will suffer, along with the firms that go and jobs that are lost. Family firms aren’t loopholes or tax shelters and they shouldn’t be political bargaining chips.