Reeves’s inheritance tax raid risks £1bn Treasury loss

Sweeping inheritance tax reforms outlined in chancellor Rachel Reeves’s Autumn Budget could cost the Treasury £1.26bn, economists warn.

Analysis from CBI Economics projects a £2.6bn drop in tax revenues over five years due to reduced economic activity, with 125,000 job losses expected as family businesses and farms slash investment or shut down altogether.

The controversial changes, which propose a 20% levy on inherited business assets over £1m and tighter restrictions on agricultural property relief (APR), have sparked outrage across sectors.

See also: Farmers Weekly Podcast Ep 231: London ‘farm tax’ protest special

The changes will trigger a huge loss in income from corporation tax, income tax and national insurance over the next five years, the research suggests.

Critics argue the measures undermine family-run enterprises that form the backbone of local economies, generate jobs, and foster community growth.

The business property relief (BPR) summit at the London Palladium today (Monday 16 December) will bring together family business leaders and farmers to call for a reversal of the reforms.

The event, supported by the London Palladium and Lord Lloyd Webber, aims to amplify the voices of those affected and push for government consultation.

Olly Harrison, a prominent farmer and co-leader of the #SaveFamilyFarms movement, stressed the urgency of the issue.

“Farmers have been vocal about APR, but the implications of BPR reforms stretch beyond agriculture. Family businesses across all sectors are at risk, and we need to ensure their voices are heard,” he said.

Kemi Badenoch, leader of the Conservative Party, is set to close the summit with a strong critique of Labour’s policy.

“Keir Starmer’s decisions will drain investment and growth out of the British economy. And no one is safe—businesses small and large, rural and urban,” she is expected to say, according to the Daily Telegraph.

Ms Badenoch will also highlight the findings from Family Business UK, which warn that the changes could devastate the economy and communities, comparing the projected job losses to “the entire population of Blackburn”.

Liberal Democrat MP Tim Farron called the tax hike “another hammer blow” for farmers already grappling with red tape and rising costs.

“This tax hike from the chancellor will hit farmers even harder, leading to the collapse of so many family farms and countless jobs,” he said.

Trade letter

Meanwhile, trade groups representing 160,000 family-owned businesses are intensifying their opposition with a formal letter to chancellor Reeves.

Signed by the NFU, British Independent Retailers Association, and UK Hospitality, the letter warns that the reforms will “starve the economy of much-needed investment” and lead to forced business sales.

Organisers hope the summit will mark a turning point, protecting family businesses and farms before the damage becomes irreversible.

With further tractor convoys and farmer protests looming, family businesses are demanding urgent consultation to safeguard their future.

A Treasury spokesman said: “We’ve capped corporation tax at 25%, confirmed full permanent expensing, and are committed to unlocking growth.

“Difficult choices were needed to address a £22bn fiscal black hole. Impact analysis on BPR changes will be published alongside draft legislation in 2025.”

The BPR Summit is open to all and offers complimentary tickets.