My tax adviser already says I should leave the country - Reeves' inheritance raid will make things worse

So much so that Labour Chancellor Denis Healey introduced Business Property Relief (BPR) in 1976 specifically to protect them and help them to thrive.

Reducing inheritance tax on their assets, he said, would be "particularly helpful to the small businessman transferring his business over a period to his successors”.

So family businesses were dismayed, to put it mildly, when Healey's successor Rachel Reeves unveiled a surprise reform to BPR in last year's Budget.

Her changes mean an increase in inheritance tax from zero to 20 per cent on all assets worth over £1 million.

Much of the noise since the Budget has come from family farms that will be hit. It's time we consider the impact on family firms too.

The truth is simple: many medium‑sized family businesses cannot pay a sudden inheritance tax bill on land, buildings or machinery. These are illiquid assets - the very thing BPR was designed to protect.

The consequence? Businesses will be forced to sell core assets, break up operations, or restructure just to meet tax liabilities. The longevity of many family businesses will be seriously threatened. That is the opposite of what we should want to see in a thriving economy.

In my firm, drinks business Global Brands, this is not hypothetical. My tax adviser has suggested I should leave the country - not something I want to contemplate.

But as things stand, my son, who works in the business, will need to pay £7m to inherit the company when I die. This simply won't be possible without breaking up the company or selling it altogether.

I know of many other businesspeople whose firms have grown over decades, investing in staff, facilities and innovation, only now to find that the tax changes jeopardise their very viability. Some have already started restructuring and implemented hiring freezes and deferred capital investment.

A recent study by Family Business UK warns of 200,000 job losses in the family business sector over the coming years if these changes go ahead.

The forecast tax take from this reform might sound a lot — £500 million a year — but in the grand scheme of things, this is peanuts for the Treasury — certainly not worth putting our family business sector at risk in this way.

In response, a coalition of business leaders is preparing a crowd-funded judicial review to force the Government to hold a full public consultation on these proposals.

We need an open forum in which affected businesspeople can present real world case studies, and the Treasury must publish a rigorous impact assessment. These proposals cannot stand untested.

Worryingly, rumours are swirling that ministers are now considering a so‑called “compromise plan” along the lines of proposals floated by the Centre for the Analysis of Taxation (CenTax), which could be unveiled in the Budget on November 26th.

While it's good to hear that they recognise the proposals can't proceed in their current form, this is not the answer.

Under the CenTax scheme, the full IHT allowance might be raised from £1 million to £5 million for certain estates, but a 40 per cent tax would bite on business assets above £10 million, with only 50 per cent relief in the £5million–£10million band. On the face of it, this might sound more reasonable. But in truth, it could be even more damaging for many medium family firms.

Why? Because it targets those whose estates are asset‑rich but cash‑poor. Businesses with values in excess of £5 million but under £10 million would suffer a 50 per cent cut in relief, exposing them to steep tax rises. In many cases, the compromise would escalate liabilities more steeply than the current proposal.

Real protection means recognising that many family firms will be forced to liquidate value just to pay tax — and that in so doing they will hollow out employment, investment and regional prosperity.

Jobs matter. The people we employ, the communities we support, the apprenticeships we sponsor — all will feel the impact of these ill-thought-through proposals.

We are not lobbying for new loopholes or unfair advantage. All we are asking is for the decades-long recognition of the importance of stable family businesses to our economy to continue.

If the Government refuses to listen, then we will see this matter in court — and I believe we will win.

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Steve Perez is the founder of drinks business Global Brands.

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