It’s more than a storm in a teacake for Sir Boyd

Sir Boyd Tunnock might be a sprightly 92 but he is mighty angry about the Chancellor Rachel Reeves’ attack on family businesses. Shares in family-owned firms will be subject to inheritance tax for the first time in decades.

Across Scotland, family businesses stretch from small mother, father, sons and daughters’ enterprises to some of our largest companies, including Walker’s Shortbread of Aberlour, William Grant & Son, the whisky giant, and the legendary Tunnock teacake dynasty from Uddingston.

More than 200 firms have written to the Chancellor urging a rethink on business property relief (BPR) and agricultural property relief (APR). BPR will be scaled back to shares valued at £1m or less. Above this rate, the heirs will pay 20 per cent inheritance tax. 

Family Business UK, a trade body, says 93 per cent of British firms are family run and calculate the changes, which come into effect in April 2026, are putting 200,000 jobs at risk. 

Neil Davy, the Chief Executive of Family Business UK, says in recent years family businesses and farms have been supported by a stable policy environment around ownership that has given confidence to business owners to make long-term investments in the future of their businesses.

“The autumn Budget 2024 brought this stable policy environment to an end. The changes announced to BPR and APR place material uncertainty over the future of many family-owned businesses,” he said.

In the absence of any Government economic impact assessment or risk analysis, Family Business UK, supported by 30 independent trade associations, asked CBI Economics to provide robust data on the impact.

The report shows that there will be a reduction in turnover and headcount of around 9 per cent in family businesses, but there will also be a significant reduction in investment, with 55 per cent of BPR-affected businesses pausing or cancelling planned investments.