The new research, conducted by CBI economics, has found that the agriculture and horticulture sectors will be worst affected by the changes to APR and BPR (agricultural property relief and business property relief) in terms of turnover, with average reductions of 12% (due to APR) and 11% (due to BPR) predicted.聽
Agriculture and horticulture is also projected to see the steepest drop in investment, averaging a 17% decline.聽
The report also predicts that capping APR at 拢1m will result in more than 28,300 job losses in the farming sector and its supply chains.
鈥淚t is not too late for Treasury Ministers to listen, to do the right thing, and change direction, for the sake of farming and the wider economy.鈥�
NFU President Tom Bradshaw
It states that some are considering selling their family business or farm entirely or looking to sell assets outside the family with 7% and 6% of respondents considering closing their business or farm in response to BPR and APR changes respectively.聽
It concludes: 'This would cause disruption to the model of family ownership which has unique socio-economic benefits.'
Read the report in full at: .
Cuts to investment and job losses
NFU President Tom Bradshaw said the report shows 鈥渢oo clearly the catastrophic impact on family farming businesses across the UK of this government鈥檚 punitive family farm tax鈥�.
鈥淭his report must serve as a wake-up call to Treasury, or we face major cuts to investment and significant job losses.鈥�
The new research estimates the changes to APR and BPR could lead to 208,500 job losses from family businesses and across their supply chains by the end of this Parliament. Construction, manufacturing and accommodation and food service activities are expected to experience the most significant reductions in workforce with each forecasting average declines of approximately 11%.
Reduced family farm activity due to APR changes will lead to a 拢1.4 billion loss in GVA (gross value added) over the next five years, the report says.
The changes to APR set out in the Autumn Budget are expected to lead to an average 7.5% reduction in turnover and a 10.6% reduction in the number of employees. These result in a GVA loss over a five-year period of 拢1.4 billion. Of this, 拢0.6 billion is directly associated with the activity of family farms.聽
Tearing up plans to invest
CEO of Family Business UK Neil Davy said 鈥渘o industry, sector, region or parliamentary constituency will be immune" from the changes, adding that business owners are "tearing up long-term plans to invest in their businesses, their employees and the communities in which they are based鈥�.
鈥淲hile parts of government are looking at how to boost regional growth and create opportunities in every sector of the economy, this research shows how changes to BPR and APR will achieve the exact opposite,鈥� he added.
Key findings from the new report show:
- Over 60% of businesses anticipate reducing investment by more than 20%.
- Around a quarter (23%) have reduced headcount due to BPR and APR changes.
- 15% (BPR) and 12% (APR) of businesses have cut charitable donations or community activities.
One respondent in the agriculture and horticulture sector who was surveyed as part of the research said: 鈥淲e have paused all projects that were not going to be delivering a significant return, for example environmental and biodiversity improvements, while we understand the implications.鈥�
'We want to be a constructive partner'
NFU President Tom Bradshaw noted that Family Business UK is 鈥渢he latest in a long line of respected organisations and bodies to call out this tax for what it is 鈥� flawed, badly thought-out, and destructive鈥�.聽
He added: 鈥淲e want to be a constructive partner. We understand only too well the fiscal pressures and objectives that need to be met.
鈥淲e urge the Treasury to review our offered solution in the form of a聽clawback policy, where the full 40% tax would be paid when inherited assets are sold.
鈥淚t is not too late for Treasury Ministers to listen, to do the right thing, and change direction, for the sake of farming and the wider economy. 聽
鈥淎cting now would also remove the abhorrent untold human impacts which we have warned about and are tragically starting to come to light.鈥�
