The owners of tens of thousands of family-run farms and businesses have urged the government to scrap its controversial inheritance tax changes.
Thirty-two trade associations, representing 160,000 family-run firms, warn that the move could trigger substantial job losses and a fall in investment.
In a new open letter sent to Chancellor Rachel Reeves, the government has been asked to consult more widely and consider the longer-term fallout of the proposal.
Set to take effect from August 2026, the changes will tighten inheritance tax relief so that family firms passing on more than £1m of assets will face a 20% levy.
Family Business UK, which sent the open letter, warns that the measure could lead to a £1.25 billion net fiscal loss due to a fall in activity and job cuts.
Its open letter also notes that some family-run farms and businesses have postponed investment and halted recruitment plans.
The letter, signed by the likes of the NFU and Country Land and Business Association (CLA), calls on the government to launch a formal consultation on the controversial policy.
"The changes to these policies will have a severe and long-lasting impact on these businesses and the livelihoods of the millions of people they employ," the letter says.
"These businesses and the economy will be starved of much-needed investment, leading to forced, premature business sales and the loss of jobs in constituencies across the country."
Family Business UK's letter also notes that the business property relief (BPR) and agricultural property relief (APR) 'are not loopholes'.
"They exist for a purpose," the letter says, "Introduced by Labour in 1976, they allow profitable businesses to continue trading, without penalty, when the owner dies.
"Where a business is able to do so, a dividend covering the cost of the [inheritance tax] bill can be paid. But this comes with an additional tax cost of 39.5 per cent – effectively double-taxing family-owned businesses."
The intervention follows a major protest event at the London Palladium on Monday (16 December), which was addressed by Conservative leader Kemi Badenoch.
She pledged to scrap the changes to BPR and APR 'at the earliest opportunity'. “It is absolutely essential that we go back to how things were,” she said.
“We won't just have a charm offensive with you like other parties, telling you what you want to hear: we are going to show you that we understand and that we are going to deliver.”
Last week, hundreds of farmers participated in a mass tractor rally in central London against the so-called 'family farm tax'.
Meanwhile, several local councils across England have passed motions signifying a show of support for farmers, in what has been described as a 'town hall rebellion' against the tax proposal.
