Taxing futures
Martin Greig Director of External Affairs Family Business UK
Figure 1: Overall Impact Table
Our latest research looking at how family-owned businesses and the economy will be hit by changes to BPR and APR offers new insights and a new perspective on how business owners will respond to these changes. The research has again been done by CBI-Economics. Working with more than 30 trade associations it has involved more than 4,000 family-owned businesses and farms right across the UK making it the most comprehensive study to date. Since FBUK first published the data on the impact of the policy change to BPR, we have built working relations with dozens of trade associations whose members include a significant proportion of family businesses. These associations span every sector of the economy from construction and home building to retail, transport, agriculture, horticulture and leisure. The size and sectoral spread of the research sample has allowed CBI Economics to produce the most robust analysis yet of the economic impacts. The numbers in Figure 1 reflect this suggesting that the combination of changes to BPR and APR will result in:
As the Government has yet to publish its own data, our research stands as the only insights showing how family business owners will behave in light of the policy changes. The Government’s fiscal watchdog, the OBR, has cited the uncertainty of these behaviours in attaching a high degree of uncertainty to the policy. One of the most striking findings from the research is that business owners are not waiting for the policy changes to take effect in April 2026 before taking far-reaching decisions which will have a lasting impact. Figure 2 shows a breakdown of these with business owners seeking professional advice, pulling current and future investment and pausing current and future recruitment plans at the top of the list. According to the research only 6% of businesses have done nothing since the Budget and only 1% will do nothing before April 2026.
Working with our network of a trade associations our latest insights have identified the sectors most affected by the changes. These include accommodation and food services, agriculture, horticulture, construction, manufacturing real estate and retail. What’s more, given the spread of these business across the UK, CBI Economics has, for the first time, been able to show the impacts across UK regions and Parliamentary Constituencies. You can find the full list on our website. The scale of the impacts are spread across the country. Figure 3 shows that the economies of Yorkshire and Humberside and the East of England will be hit hardest by reductions in investments made by family busi- nesses. The North-West, North-East and Scotland will feel the impact of decisions to reduce recruitment, while reductions in the turnover of family businesses will be seen most in the East and West-Midlands.
l £14.9 billion reduction in GVA (economic activity)
l 208,500 FTE job losses
l £1.9 billion net fiscal loss to the Government
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