UKH urges government to rethink inheritance tax reforms

UKHospitality (UKH) has called on the government to reconsider proposed reforms to inheritance tax that could devastate family-run hospitality businesses across the UK, looking to address both its Budget submission and evidence to the House of Lords Economic Affairs Finance Bill Sub-Committee inquiry on the issue. 

The trade body warns that changes to Business Property Relief (BPR) risk forcing the sale of viable businesses, undermining generational succession, weakening rural and coastal economies and reducing reinvestment and long-term tax receipts. 

Paul Milson, managing director of Milsom Hotels & Restaurants, adds: "I believe the government's approach is incredibly short-sighted. While we understand the need for increased revenue, putting the viability of good family businesses at risk across the country is not the answer.

"This policy could lead to businesses being sold off to less committed investors or even collapsing, ultimately resulting in job losses and less tax revenue in the long run. The government really needs to rethink this and extend the consultation period to fully understand the economic impact. As it stands, this move feels like it was made without proper research and could be deeply damaging to the backbone of British industry."

A grim outlook

Recent member survey data reveals that 47% of family-owned hospitality businesses expect to be directly affected, with 51% cutting back investment and a fifth anticipating being forced to sell up.

In response, UKH is calling for a pause and extension of consultation with full sector engagement, a delay to implementation until at least 2029, and preservation of the principles behind APR and BPR to safeguard productive capital and generational continuity. 

"These reforms are flawed in design, rushed in process and unfairly target small- and medium-sized family businesses," says Kate Nicholls, chair of UKH. "Without changes, many operators will be forced to sell assets in weak markets, with devastating consequences for jobs, investment and communities. 

"The principle behind BPR was to safeguard family-run businesses, but these changes sadly do the opposite. I urge the government to think again and reconsider these reforms."

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