A Business Friendly Government Please

Five million family businesses warn the new PM to fix inheritance tax, stop the tax raids, and finally put local firms first

The UK’s family businesses are the shops, farms, workshops, manufacturers and firms built over generations and Family Business UK says the last two years have been brutal.

Instead of stability, they’ve faced constant uncertainty, daily speculation, and a string of tax changes that have left owners fearing for the future.

When Labour won in 2024, it promised to be the “most business‑friendly government ever”. Family firms were hopeful but today, many say that promise has been broken.

Inheritance Tax changes:

The biggest flashpoint was the scrapping of long‑standing Inheritance Tax reliefs: Business Property Relief (BPR) and Agricultural Property Relief (APR).

These reliefs were designed to:

• protect family ownership

• support long‑term investment

• keep jobs rooted in local communities

• stop forced sales when an owner dies

However, the changes unended those intentions and family firms now face:

• a future tax bill their competitors don’t

• a two‑tier system where foreign‑owned and non‑family firms escape the burden

• scrapped investment plans

• paused hiring

• short‑term survival replacing long‑term stewardship

More than half of family firms still hit

New research from Family Business UK shows:

• More than half of family businesses will still be affected by the IHT changes

• For firms with 50+ employees, the impact is significantly worse

• There is no upside to keeping the policy

Family businesses want the changes reversed so they are:

• simple

• fair

• pro‑growth

• pro‑jobs

• and deliver a huge confidence boost

• Tax hikes, rising costs and stalled confidence

Family firms say the last two years have been a perfect storm:

• relentless tax increases

• rising labour costs

• soaring energy bills

• higher borrowing costs

• policy instability

• constant rumours of “the next tax raid”

Owners say they’ve been forced to operate in survival mode, not growth mode.

The new PM has a “golden opportunity”

Family businesses want Andy Burnham to:

1. Reverse the Inheritance Tax changes immediately

Put family firms back on a level playing field.

2. Stop the endless tax increases

Give businesses breathing room to invest and hire.

3. Back scaling family firms the forgotten middle

There are 10,000 mid‑market family businesses:

• contributing £140 billion to the economy

• employing nearly one million people

Imagine the growth if they were incentivised instead of penalised.

4. Put family firms at the heart of place‑based growth

They are the anchors of high streets, towns and rural communities.

5. Deliver on manifesto promises especially late payments

Despite the fact that the Commercial Payments Bill is moving quite quickly through the parliamentary process, family firms want the process speeded up and it to be a day‑one priority.

Family businesses feel misunderstood, undervalued, essential

Too often, policymakers dismiss family firms as “lifestyle businesses”, but the truth is very different:

• They invest for decades

• They employ local people

• They stay rooted in their communities

• They reinvest profits instead of extracting them

• They are the basis of regional economies and one of Britain’s greatest economic assets. They want government policy to recognise that.

Family businesses say:

• They were promised stability and got speculation

• They were promised pro‑business policies and got tax hikes

• They were promised growth and got barriers

• They were promised partnership and got penalties

Now, with a new prime minister, they want a reset.

Reverse the IHT changes. Stop the tax raids. Back scale‑ups. Fix late payments. Put family firms at the centre of local growth, because if the UK wants a stronger economy, it needs its family businesses firing on all cylinders rather than fighting for survival.