The Builders Merchants Federation (BMF) is one of 32 trade and industry groups to sign an open letter coordinated by Family Business UK, which calls for a formal consultation on the planned changes to Business Property Relief (BPR) and Agricultural Property Relief (APR).
The letter highlights concerns that the reforms could have far-reaching consequences for businesses across various sectors, with a particular focus on the construction industry.
John Newcomb, CEO of the BMF, voiced his concerns about the impact these changes could have on the future of family-owned construction businesses.
“Construction is absolutely critical to the lifeblood of the UK economy, but we are hearing across the industry that the changes in inheritance taxation could limit the future of the sector,” Newcomb said.
“Many private and family businesses across our membership are reporting that the impact of Business Property Relief changes will damage enterprise.”
The BMF, which represents the UK’s building materials sector, believes the proposed changes could undermine business confidence and investment. Newcomb pointed out that many members are already revising their trading forecasts and delaying key investment decisions, including upgrades to production lines and expansion plans.
“Most BMF members are now reviewing their sales and trading forecasts for the next two years and looking at investment decisions, stock levels, and staffing numbers,” he explained. “Early indications are that the proposed changes to Business Property Relief pose significant concerns to family-owned businesses.”
The letter, signed by the BMF and five other major construction trade bodies—the British Coatings Federation, Construction Plant-Hire Association, Electrical Contractors Association, Home Builders Federation, and Commercial Interiors UK—represents a total of 160,000 family firms and farms across the UK. These groups argue that the reforms, rather than raising additional revenue for the government, could result in a £1.25 billion net fiscal loss and lead to more than 125,000 job losses. The changes could also reduce economic activity by £9.4 billion over the course of the current Parliament, according to economic modelling commissioned by Family Business UK and conducted by CBI Economics.
Family-owned construction businesses are particularly concerned that the changes will force them to cut back on investments, such as replacing plant and machinery, expanding product ranges, or hiring new staff and apprentices. “We suspect owners may choose to defer or cut back on investing in or expanding their operations in the near term,” Newcomb said. “This is a retrograde step for each company, and our supply chain, as it diverts money away from operational needs.”