The Scottish Plant Owners Association (SPOA) has written to Prime Minister, Sir Keir Starmer, urging him to consult with family businesses across the country who will be affected by the decision announced in the Autumn Budget to remove Business Property Relief (BPR) and Agricultural Property Relief (APR).
Scottish plant owners contribute £7.4bn to the economy and directly employ over 43,000 people. The majority of businesses in Scotland’s plant sector are family businesses, and over 90% of them are SMEs. The UK’s largest privately owned crane hire company and the UK’s largest privately owned plant hire company are both Scottish family businesses.
Plant businesses are heavily invested in expensive assets and property, taking them significantly over the £1m allowance for 100% BPR or APR.
Due to this year-on-year investment in their business to stimulate growth and satisfy national market demand, business owners will not typically have the cash reserves for a one-off inheritance tax event. In order to generate the cash to pay for this tax, businesses will likely be forced to sell all or part of their business, likely to private equity, a PLC or an overseas company with no interest in local communities or in retaining local jobs. There would be an impact on the pool of likely buyers and the valuation of the business effectively being forced to sell. Secondly, it would result in redundancies as administrative functions would be combined regardless of the buyer. The SPOA believes that a worst-case scenario, is that jobs will be lost from Scotland and the UK altogether.
The trade association is therefore urgently calling for a formal consultation with plant owners. John Sibbald, President of the SPOA, explained:
“The announcements made in the November Budget pose a grave and unprecedented threat to Scotland’s plant industry and other similar businesses throughout the UK. These proposals are shockingly unjust, woefully misguided, and risk dismantling the very foundation of the family business model. They threaten to dismantle one of the UK’s most dynamic and enduring sectors – private, independently owned family enterprises – dealing a devastating blow to communities and putting countless livelihoods at risk.
“The Treasury has made clear that it has no intention of reversing this damaging policy or even considering alternative proposals, despite analysis from independent economists concluding the policy will result in a net loss to the Government, hinder investment and result in considerable job losses.
“The SPOA is therefore directly calling on the Prime Minister to intervene and hold a formal consultation on this matter and hear from family business owners like our members. We would welcome the opportunity to put forward alternative ideas that could generate additional funds for the Treasury, whilst protecting family businesses and giving them the incentive to continue to invest, provide job security and sustainable livelihoods for employees, stimulating the economic growth the country desperately needs.”
The full letter to the Prime Minister can be read here.
