Labour’s Business Property Relief plans risk destroying family businesses like mine: Kiran Fothergill
Now another sucker punch is on the horizon. There’s still time, though, for the government to drop its gloves, retreat to the corner, and give businesses a fair fight.
That potential knockout blow, particularly for family-owned SMEs, comes in the form of proposed changes to Business Property Relief (BPR).
For more than 30 years, BPR has been a cornerstone of the UK’s inheritance tax system. It allows qualifying business assets to be passed down without incurring a punitive tax bill, enabling family-run firms to transition smoothly across generations. Under the new proposals, however, BPR will be capped at the first £1 million of business asset value, with any excess taxed at 20 per cent from April 2026.
On paper, that might seem like a move to ensure fairness or close loopholes. In practice, it risks destabilising the very foundation of many family businesses, organisations that have, for decades, built local economies, supported communities, and employed millions.
Take our business, Shorts Lifts, based in Bradford. It’s been operating since 1945. Since my family acquired Shorts, we’ve invested heavily in the company’s growth, secured new contracts, developed new products and services and now employ over 65 people. We are proud of what we’ve built, and of the people who’ve helped us build it.
While I can’t say definitively that Shorts Lifts will be directly affected by the BPR changes, we are certainly part of the business community that could be drawn into their net. And that’s a concern, not just for us, but for the many SMEs in Yorkshire and beyond who may now be forced to make difficult decisions about their future.
Inheritance tax wasn’t designed to dismantle viable businesses. But if these reforms go ahead, that’s exactly what could happen. Valuations of businesses, often based on theoretical value rather than cash in hand, could saddle families with large tax liabilities, payable almost overnight. One example that sticks with me is a family business valued at £300 million, led by an older generation.
If the owner were to pass away, the next generation could be facing a £60 million tax bill. The only practical outcome? Sell the company, possibly to a foreign buyer, and move the operation offshore. And with it, the jobs, the investment, and the community roots.
That’s not a one-off case. According to research by CBI Economics for Family Business UK, capping BPR could result in over 125,000 job losses, reduce national output by £9.4 billion, and paradoxically, cost the Exchequer £1.3 billion over the first four years. The idea that this change will boost the Treasury’s coffers simply doesn’t hold up.
It’s not just about cold numbers, either. It’s about culture. Family businesses are not just economic units—they’re legacy enterprises, passed on through generations, often with deep emotional and personal ties. They think long-term, invest locally, and remain resilient in tough times. But they also depend on certainty and trust in the rules they’re playing by. Moving the goalposts in this way sends the wrong message entirely.
The CBI’s study shows that 27 per cent of family businesses with assets over £1 million expect to transfer ownership during the period when the new rules would apply. Nearly 5,000 businesses are already preparing to downsize, cut investment, or reduce headcount. A worrying 15 per cent are considering selling up entirely.
That’s a serious warning sign and a moment for pause.
If the government is serious about growth, about jobs, about ‘levelling up’ and supporting UK businesses, then it needs to stop treating family businesses like they’re expendable. We are not tax dodgers. We are not loopholes. We are local employers, long-term investors, and vital contributors to this country’s economy and social fabric.
There is still time to reconsider. Reforms should be designed to support enterprise, not stifle it. A reformed BPR could include better targeting, clearer criteria, and protection for SMEs without opening the door to abuse. What it shouldn’t be is a blunt instrument that forces proud, viable family businesses to consider sale or closure simply to pay a tax bill.
We’ve spent years building Shorts Lifts into a modern, growing business, and we’re just one of thousands of similar firms across the UK. The question now is whether government policy will help us continue that journey or cut it short.
Kiran Fothergill is Director of Shorts Lifts
