Jobs and the economy hit by changes to BPR
Changes to Business Property Relief announced in the Autumn Budget 2024 could cost the Government more than it raises, according to our final analysis of the policy change.
More than 125,000 jobs are likely to be lost and economic activity reduced by £9.4 billion as family businesses reduce investment to cover a future Inheritance Tax bill.
Read the final report from CBI-Economics here.
The Government expects changes to BPR (and Agricultural Property Relief) to raise £1.4 billion over the course of this Parliament. But FBUK’s report, produced independently by CBI-Economics, predicts that lower investment and hiring by family businesses would actually lower tax receipts resulting in a £1.26 billion net fiscal loss to the Government.
Neil Day, CEO of FBUK said: “Changes to BPR, announced in the Autumn Budget 2024, place a material uncertainty over the future of family-owned enterprises and, as a result, the growth ambitions of this Government.
“Business Property Relief (BPR), which was introduced 50 years ago, underpins the entire model of family ownership ensuring that, when the owner dies, businesses do not need to be broken up or sold off to pay a large Inheritance Tax bill.
“For the last 50 years, BPR has quietly and without controversy, done exactly this.
“The purpose of this report from CBI Economics is to understand and quantify the likely impacts of the change to BPR on Britain’s family-owned enterprises and give context to the debate about the changes to BPR.
“I very much hope this report will be used by family businesses, policymakers, government, academics and the media to better understand the contribution made by family businesses to our economy and society, and how we will all be affected by an apparently simple policy change.”