UK family businesses fear ‘dishonesty’ in Labour’s tax plans

UK family businesses are beginning to fear dishonesty within Labour’s tax plans set to be revealed in the upcoming Autumn budget, a new poll has found.

The poll, conducted by Censuswide and commissioned by Family Business UK, revealed that out of the 500 UK business leaders surveyed, 80 per cent of family businesses said they did not believe the Labour Party was honest about its plans for tax rises.

Most businesses cited a fear of rises in corporation tax, despite Labour’s manifesto pledge to small businesses to not increase it.

Over half of the surveyed respondents also the Government’s business policies were “unfavourable.”

The need to retain business property relief was also highlighted, with 67 per cent of family firms saying the policy — which helps reduce the value of a business or asset when determining the price of inheritance tax relief — is crucial to the success of their business.

If the policy was removed, 31 per cent would have to sell their assets, with 20 per cent saying they would be sold or liquidated to “cover additional costs”.

The findings come as Rachel Reeves delivered her keynote speech at the Labour Party conference in Liverpool on Monday, striking a more optimistic tone as she promised that the budget would be one “for investment.”

Neil Davy, chief executive of Family Business UK, said: “The Chancellor used her speech at the Labour Conference to repeat a pledge to not increase the rates of Income Tax, National Insurance or VAT.

“But a running commentary about the budget deficit and the need to increase other taxes is extremely damaging for business.”

The need for growth and investment is clear, Davy said, but he doesn’t believe there has been a renewed sense of confidence or stability.

He adds: “That’s not what our research indicates – particularly for family businesses who are fearful the Government may be about to pull the rug from under them, removing tax policies that underpin their very model of ownership.”