A Message from the Chair Designate
Dear FBUK Members,
Please find below a message from Steve Rigby, Deputy Chairman, and Chair designate, of Family Business UK (FBUK) and CO-CEO of the Rigby Group PLC.
Click here to download and read the PDF message.
END.
A Message from the Chairman
Dear FBUK Members,
Please find attached a message from Sir James Wates CBE, Chairman of Family Business UK.
Click here to download and read the PDF message.
END.
FBUK Unveils “Ones To Watch 2024”
Family Business UK has today kicked off Family Business Week 2024 by unveiling the winners of this year’s Ones To Watch.
Four individuals, spanning hospitality, farming, technology and the parking industry, make up this year’s winners with each demonstrating a personal commitment to going above and beyond.
Our 2024 Ones to watch are:
You can read about our individual Ones to Watch here
Neil Davy, CEO Family Business UK said: “Every year, our Ones to Watch winners raise the bar for excellence and commitment in the family business sector. This year, we were looking for individuals who really live and breathe the values of family businesses as the lifeblood of local communities and local economies.
“In every one of our winners, doing the right thing for people, the community and the environment both inside and outside their business is a both a personal motivation and the thing that puts family businesses ahead of the competition.
“I extend my personal congratulations to Caroline, Louis, Anton and Sarah and I hope you will join us in celebrating their achievement.”
Family Business Week is proudly sponsored, for the fourth consecutive year, by Natwest.
The Government has used the Budget to introduce changes to the Inheritance Tax regime. Specifically, it is changing how Business Property Relief (BPR) and Agricultural Property Relief (APR) will be applied to family-owned enterprises. These changes will have an enormous impact on family-owned business and farms across the UK and will be particularly felt by multi-generational businesses in long-term ownership.
The changes will also affect BPR applied to shares listed on AIM.
The changes will take effect from April 2026.
There are 4.8 million family businesses in the UK employing 13.9 million people and contributing more than £200 billion a year in taxes to the Exchequer.
The activities of family businesses, including across their value chains, adds £575 billion in economic activity (GVA) every year. Without them the British economy would be considerably smaller.
The current system of Inheritance Tax reliefs, which has been in place since 1976, has allowed family business owners to confidently plan for the future knowing that, in the event of their death, the next generation will be allowed to take over the business without incurring significant tax penalties.
We believe the changes to BPR and APR, announced in the Budget, represent a failure by Government to understand the nature of the reliefs and their role in supporting long-term patient investment.
As the largest organisation advocating for and representing family businesses and the model of family ownership, we believe the changes in the Budget are hugely damaging not just to family-owned enterprises but the entire UK economy. We are asking the Government to consult with us, our members, partners and stakeholders to reverse the changes.
Current system
| Qualifies for BPR at 100% | Qualifies for BPR at 50% |
|---|---|
|
|
NB – The trading test for IHT excludes most property investment and financial services businesses from claiming BPR at all and that has long been the case
New system
Over the course of this Parliament, the Government forecasts that these changes will raise:
| 2024-5 | 2025-6 | 2026-7 | 2027-8 | 2028-9 | 2029-30 |
|---|---|---|---|---|---|
| £0 | £0 | £230 m | £495 m | £520 m | £520 m |
£520 million p.a. represents 0.02% of GDP (based on 2023 GDP)
In its assessment of the changes, the Office for Budget Responsibility says the costings for these changes are unlikely to reach a steady state for at least 20 years. Moreover, the way in which people respond to the changes will lead to a reduction Inheritance Tax yields by 40% as people make use of allowances and dispose of assets before death.
It is worth noting that, for now, the rules on lifetime gifting (ie immediate potential CGT with possible holdover relief and a 7 year survival rule for IHT) remain unchanged.
Trusts: Gifts into Trust of property during the lifetime of the donor / settlor will be subject to the new IHT rules. However, the Government will run a technical consultation, early next year on the rules around Trusts. One of our asks of Government is to broaden this consultation to look at changes to IHT reliefs in the round.
The Dividend Tax
It is unclear whether the Government has fully considered how the majority of estates will fund the IHT charges. Typically, more than 90% of the personal wealth of family business owners is invested in and tied-up in the business.
It is not stored in cash, or as liquid assets that are easily accessible for those taking over the business to pay an Inheritance Tax bill – especially when it happens unexpectedly such as the sudden death of a family member who is also the business owner.
To pay the IHT liability these businesses would have to extract cash from the business in the form of a dividend to the recipient beneficiary paying the IHT. In most cases dividend tax rates will apply, with a cost of extraction nearer 40%. Rather than pass the business on to the next generation, and secure long-term jobs and employment of their staff, business owners will be left with no choice but to borrow heavily (for tax not expansion reasons) or sell.
The government defines a micro business as a business with a balance sheet of less than £1.6m, a small business as less than £8.3m and a medium business as less than £36m.
Research produced for Family Business UK by CBI Economics ahead of the Budget showed that £29 billion and 391,000 jobs could be lost without policies that support family businesses.
The findings showed that removing Business Property Relief (BPR) and Gift Holdover Relief (GHR) would lead to significant impacts on family business:
Business Property Relief has been retained by successive governments for almost 50 years after it was introduced by a Labour government in the 1970s.
Previous governments have understood that BRP and APR provided a lifeline to family firms, enabling them to make long-term investment plans in the knowledge they will not be financially disadvantaged if the owner passes away.
Moreover, these reliefs allow family businesses to compete on a level playing field with other models of business ownership, none of which are subject to these additional tax liabilities when the ownership is transferred. Removing the reliefs will leave British owned family business uncompetitive.
The damaging impact on family businesses and the jobs, investment and growth they provide to their local economies, means the government must think again.
Family Business UK is the largest organisation dedicated to promoting, championing and advocating for family businesses. It is movement of the largest and best-known family businesses across the country, including a number of household names and global companies, and small, high-growth SMEs. It works to showcase the role family businesses play in creating a more prosperous and sustainable future and highlighting the impact of family-owned businesses.
FBUK is a not-for-profit organisation.
There is no growth agenda for Yorkshire without family businesses.
Thomas Martin, Chair Arco Ltd and the Yorkshire Regional Business Engagement Board
Right across Yorkshire, home-grown family businesses are wondering – what just happened? In 76 minutes, the Chancellor delivered a Budget that undermines hundreds of years of family business ownership in our region.
Yorkshire has a proud history of family businesses. The deep-seated values that we prize of hard work, responsibility, respect, community spirit run deep in businesses like mine, which has been trading in family ownership for 140 years.
Others like AW Hainsworth have been doing the same for 240 years, Bettys & Taylors 105 years, Howarth Timber 184 years. The list goes on.
But in the Budget the Chancellor put all this under threat by changing long-established policies that support us.
For the first time in almost 50 years, family businesses across Yorkshire will be subject to Inheritance Tax when the owner dies – something that is forcing many to wonder whether they will ever be able to pass on their business to their children. And whether their children will be able to afford to take them on?
Don’t get me wrong, I’m not arguing that family business owners shouldn’t pay their fair share of tax. We already do. Britain’s 4.8 million family businesses contribute more than £200 billion in tax every year – about a quarter of all taxes received by the Government.
But let’s be clear, for someone inheriting a family business, they are not taking on a prized Ming vase, family heirloom or nice house. It is the fabric of business. Family famers too are facing exactly the same threat. The tools of their business will also be taxed when they are passed to the next generation threatening food security and environmental management as assets are used to achieve maximum economic return.
The problem is that whilst Inheritance Tax is a tax on the individual, in the case of family businesses it becomes a direct cost to the company.
Take an average business valued at £8m, a family member inheriting it will now be expected to pay 20% tax on that (minus the first £1 million) to take it on when the owner dies. Not many people have that kind of money kicking around and so they will need to take a dividend from the company. That will be subject to additional tax rate of 39.5% meaning companies will be double taxed.
The cost will ultimately be paid through reduced investment, less growth, fewer jobs and more redundancies as companies divert money to cover a future tax liability. In worst case scenarios, neither the business or family member can pay the Inheritance Tax and will be forced to sell the business, or parts of it.
When you add on the massively increased burdens this Government is placing on business through increased employers National Insurance contributions, new employment legislation and minimum wage, the changes to Inheritance Tax are draining what little confidence we had left.
Business needs confidence. It imbues a sense of certainty that underpins the very nature of private enterprise, allowing companies of all sizes to take risks and invest in both their communities and people to generate long-term prosperity.
Home-grown family businesses do that better than most. We aren’t ‘here today gone tomorrow’ fly-by-nights. We take pride in what we do. It is our name above the door and we work hard to protect that whilst respecting our employees and the communities we serve.
The sheer bloody mindedness of Yorkshire folk has done them proud for generations. The fact there are so many long-established family businesses here in Yorkshire is testament to that. We are a proud county with a rich history.
But in a 76 minute Budget speech the Chancellor has unwound hundreds of years of patient planning and investment that will likely result in lower taxes, lower growth and lower employment.
I cannot believe this is what the Chancellor had in mind when she announced the closing of what she and others have called a “loophole.” As the Chairman of a long-established family business, and a director of Family Business UK, I am calling on the Government to consult with us to reverse this change and protect our proud heritage of family business.
END.
This article originally appeared in the Yorkshire Post on 14th November 2024.
Find out more about FBUK’s Back Family Businesses Campaign here.
FBUK Family Council Community shares Best practice
The FBUK Family Council Community met online this week to discuss how to extract maximum value, from your Family council.
The online call featured a fascinating case study by leading independent engineering and services company, NG Bailey, followed by an open Q&A session.
NG Bailey Family Council co-chairs Chris Bailey and Claire East took us through the evolution of their council, since its original formation in 2005.
This eye-opening history highlighted some of the challenges faced with an ever-expanding family forum, and suggestions on how to best structure the family council to ensure all voices are heard ,and decision-making happens quickly and effectively.
The case study highlighted the value of the Family Council as a sounding board for the F-NEDs on the Board and the value to the individual member, who is offered development and learning opportunities to deepen their understanding of the business.
Nearly two decades later, the NG Bailey Family Council is now re-evaluating its purpose to ensure it remains relevant and continues to meet the needs of the family and the business.
A lively Q&A followed the introduction, with members of other family councils taking away advice to apply to their own structures and operations.
Our thanks to Claire and Chris who spoke candidly about the challenges and opportunities faced by the council and helpfully outlined the rhythm of meetings, election of members and significance of culture in the council’s success.
This Community deeply benefits from the experiences of real family businesses, shared openly, so that peer-to-peer knowledge share and connections, aid the developments of our delegates own practise.
We are delighted to have Ben Allan from Wykeland Group confirmed to present the next case study at the online meeting in May 2025.
Family Council Community
A Family Council forms an important communication bridge between the business and the family, whether it is educating the family for their future responsibilities, acting as a bridge between the family and the business to settling disputes within the family.
The richness of conversation within our exclusive peer communities stems from the breadth, depth and experience of members engaged, so we encourage anyone who wishes to be involved in this, or our other FBUK communities, to email info@familybusinessuk.org to join the group.
Find our more about FBUK’s Peer Communities here.
FBUK Members Resource Centre
FBUK Members can also find an additional variety of Family Council, and other useful resources, within the Members Resource Centre here.
FBUK addresses Good Governance in Disruptive Times
Family Business UK were delighted to host an open and honest roundtable discussion on ‘Good Governance in Disruptive Times’ in London yesterday, the 6th November 2024.
Kindly hosted by FBUK Corporate Partners PwC and with expert contributions from both PwC and Boodle Hatfield, this session provided senior family business leaders with an opportunity to consider governance challenges faced by a broad range of roles and generations within UK family businesses.
After reframing external risks as opportunities to create agility in business, we explored ‘what is good governance in practice?’
Our panel, including Steve Rigby, James Perry and Sian Steele, expertly moderated by Sophie Ashburton, sought to debate what is most important in relation to good governance?
What might get in the way of good governance? And why are family businesses, at their best, uniquely set up to be exemplars of good governance?
Steve Rigby, CO-CEO of Rigby Group PLC, discussed the importance of family board’s aligning their views so that a message delivered to the executive is heard as one voice. Steve advocated for independent advice/support to help manage the emotion inherent in family business, so that families can better communicate what they wish to achieve.
James Perry, co-Founder and Co-Chair of COOK, explained what it means to be a purposeful organisation and the pride he felt in changing the articles of association to show their commitment to good governance.
James gave tangible examples such as the decision to be part of the Living Wage Foundation and how honesty and transparency created authentic conversation.
Sian Steele, portfolio NED, shared examples of how family businesses can adapt to roll with the punches, pivot fast if they need to or hold hard. Sian spoke about how being direct in the right way (radical candour) is helpful in bringing up things that appear painful to talk about, but are necessary.
The roundtable discussion which followed, conducted under Chatham House Rule, explored a number of individual challenges being faced currently within attendee’s family businesses.
The strong culture of honesty amongst family business meant that attendees felt safe to share in-depth and openly, so that they could gain the support they needed.
Thoughtful input from both subject matter experts and perspectives from other FBUK members, gave practical advice on how to manage the difficulties, learnt from their own experience in similar situations.
Some of the key takeaways from the day included:
A general consensus about communicating well, whether around the kitchen table or around the boardroom table, meant an investment in relationships which takes a first step towards good governance.
Further Reading on Good Governance
Some “tried and tested” tools recommended by our delegates, in the room, to help understand better ways of communicating included:
For those interested in some further reading, delegates shared a number of powerful book recommendations including:
The FBUK Member Resource Centre
FBUK Members can find further exclusive resources, including our unique digital tool & model – Family Business Life Stages, within the FBUK Members Resource Centre,
As part of FBUK’s support to the sector, the public can access range of topical, “open” expert resources on the FBUK website here.
FBUK shall be running many more events in 2025 to help our members explore best practice and knowledge share, on topics of material import to family business.
FBUK Programmes & Events
View the FBUK Programmes & Events calendar here.
Family Business UK’s Annual Conference for 2025 – The Family Business Recipe – is now open for registrations.
Taking place in Manchester from the 4th to 6th June 2025, the Conference will focus on how family businesses can harness values and principles to help create and sustain competitive advantage.
The purpose and values of a family business, like the ingredients in an old family recipe, are inherited; passed from the kitchen table to the boardroom table over generations.
Reinterpreted by successive generations, these essential ingredients determine the culture of each family business and are what helps give each one it’s unique flavour and characteristics.
But how well do you make the most of those precious ingredients, and use them to create a competitive advantage and a leading position in the market?
Announcing our Opening Keynote
Sir John Timpson CBE of Timpson will give us a unique perspective on his sense of responsibility, as a successful family business, which drives the implementation of purpose as a business; why it is important, how it sets the business apart from others and how family businesses can embed their values into the operational running of the business.
Sir John was born in Manchester in 1943, he joined the family footwear business William Timpson Limited, becoming the Director in 1970.
After a boardroom split that ousted his father, and following the acquisition of the company by the UDS Group in 1973, he became Managing Director of leather and fur retailers, Swears & Wells Limited. In 1975, John was appointed Managing Director of William Timpson his original family business.
In 1983, he led a £42m management buyout of the company which had become part of the Hanson Trust. It was the UK’s largest MBO at the time.
In 1987, he sold the shoe shops to rival retailer George Oliver to concentrate on developing the shoe repairing and key cutting business. The company has diversified into engraving, watch and mobile phone repairs, dry cleaning and photo processing.
Take part in the Annual Conference 2025
Join 200+ family business owners, leaders, execs & non-execs, their next gen, peers and supporters, at the Family Business UK Annual Conference 2025, to discover how the vital ingredients of purpose and values can help sustain a successful family business.
Early-bird rates available until 31st December 2024.
