A hotel tycoon has binned plans to invest £20million into his British hospitality empire because of Rachel Reeves‘s ‘anti-business’ inheritance tax raid.
Steve Perez ditched his plans to extend his string of upmarket hotels and restaurants in the East Midlands, claiming the potential cost to his family if he died meant there would be little incentive.
The entrepreneur, who also owns drinks company Global Brands, was granted planning permission to add a spa and 27 bedrooms to his Peak Edge hotel, which is on farmland.
He was also about to apply for permission to install a new canning line at his drinks factory in Clay Cross, Chesterfield – which he says would have created 50 jobs in the area.
But he has now made a U-turn on these investments, as he fears that the Chancellor’s changes to inheritance tax relief will leave his family with a huge tax bill when he dies.
In her maiden budget, Ms Reeves announced a major shake up to business property relief, meaning properties that were handed down to descendants and valued at more than £1m will now have to pay the levy at a rate of 20 per cent.
Steve Perez ditched his plans to extend his string of upmarket hotels and restaurants in the East Midlands, claiming the potential cost to his family if he died meant there would be little incentive
In her maiden budget, Ms Reeves announced a major shake up to business property relief, meaning properties that were handed down to descendants and valued at more than £1m will now have to pay the levy at a rate of 20 per cent
Previously, properties used for business purposes could be passed down free of inheritance tax.
Mr Perez told The Telegraph: ‘I’m fortunate, I’m a wealthy chap. What people like me do – I’m an entrepreneur – rather than just going and buying a new boat or something like that, or buying a jet, I’ll invest in my business.
‘What this is going to mean is insecurity for the working person in my business, because once I die, their jobs are on hold. The business may well be sold so straight away – that gives them insecurity, rather than security.’
He went on to label the budget as ‘anti-entrepreneurs’ and ‘anti-business’, adding that an inheritance tax raid would raise questions over the future of his farms.
After creating the vodka-based cocktail drink Vodka Kick (VK), Mr Perez founded his drinks company, Global Brands, in 1997.
It now owns brands including Hooch and Franklin & Sons and its latest accounts show it posted revenue of £75m in 2023.
He expanded his business empire with the construction of the Casa Hotel in Chesterfield in 2010, going on to buy the nearby Peak Edge Hotel as well as the Red Lion Restaurant in 2017.
He also owns a farm, called Walton Lodge, which supplies food to his hotels and restaurants.
Mr Perez joins a long list of business owners and farmers who are furious with Ms Reeves proposals.
Farmers demonstrated in London in March over food security fears – and it is feared they could do so again
A field of potato crops. There are fears changes to farm inheritance rules could impact on the country’s ability to grow its own food
There are fears supermarket prices could rise as Tesco faces having to pay an extra £1 billion tax bill thanks to Rachel Reeves ‘ National Insurance raid on businesses
There are fears changes to farm inheritance rules could impact on the country’s ability to grow its own food.
It came as unions said farmers were considering ‘military’ action – including a sewage strike.
George Weston, boss of Associated British Foods, which supplies farmers with feed and technology services, said the death taxes on farms pose a threat to the country’s ability to grow its own food.
There are also fears supermarket prices could rise as Tesco faces having to pay an extra £1 billion tax bill thanks to Rachel Reeves’ National Insurance raid on businesses.
The supermarket will have to pay £250 million more for each of the next five years under a Labour government, according to analysis by Morgan Stanley.
Tesco, which is expected to make £2.9 billion in operating profits this year, did not dispute the figure when it was put to them by The Sunday Times.
Sainsbury’s, Asda, and Morrisons’ bill comes to a combined £1.3 billion over the course of this Parliament.
It comes following Ms Reeves’ decision to raise employers’ National Insurance to 15 per cent from next spring.