Building Britain for Generations: A Policy Agenda for Family Businesses
Start, Scale and Stay Previous Governments have focused heavily on tax incentives for start- ups, and entrepreneurs who plan to scale quickly and sell their businesses. This means the needs of long-term, sustainable scale-ups have been overlooked. We need a tax environment which makes the UK the best place for founders to start, scale and stay with their businesses. This includes incentivising and supporting founders and multi-generational business owners. Family businesses are the missing piece of the jigsaw in scale-up and industrial policy frameworks, which are designed around ‘venture- backed’ or private-equity-owned growth trajectories. Recommendations Provide better incentives for family offices to invest patient capital in other businesses looking to scale up. This will recycle capital from one set of successful family businesses into the next, enabling diversification and harnessing scale-up potential. This could also include exploring Enterprise Incentive Scheme style incentives and encouraging Corporate Venture Capital participation.
Export Finance and Business Support Access to finance remains one of the most persistent barriers to SME exporting. Although UK Export
The current tax system provides a tax incentive to exit a business, as there is an effective tax rate of 24% on gains versus an effective 54% on generating profits and taking a dividend. This additional 30% tax rate on retaining a company for the long term and extracting value by dividends rather than exiting does not support long- term holding of UK companies, but incentivises exits, often to overseas investors. Providing entrepreneurs with allowances if they invest in long-term businesses, which are epitomised by family-owned firms, would create a culture for longer-term investments built on patient capital.
FBUK believes there is a strong case for closer collaboration between Government, UK Export Finance, and business organisations such as FBUK to ensure that family- owned firms can access the export finance and advice they need. This should include tailored outreach and advisory services, flexible credit guarantees for first time exporters, and small-scale grants or support mechanisms to cover practical needs such as translation, international marketing, and supply chain integration.
Finance supported more than £575 million in SME exports last year 10 , only a small fraction of exporting SMEs currently use these services. Many still rely on overdrafts or loans rather than dedicated trade finance.
Recommendation Create an Export Support and Finance ‘task and finish’ group to address the unique barriers family firms face. Convened by FBUK, DBT and UKEF this would help more family firms take their first, or next, steps into international trade.
Allow rollover relief for investing in private trading companies. If someone sells an asset and reinvests the money into buying shares in a UK private trading business, they should be able to rollover paying Capital Gains Tax like the current EIS system, but without limits on the size of the company.
10 Initial Scale-Up Institute Date (2025), commissioned by FBUK, to be published Q1 2026
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