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Thu 30th Oct 2025 - Family-run sector businesses flag devastating consequences of inheritance tax reforms |
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Family-run sector businesses flag devastating consequences of inheritance tax reforms: Family-run sector businesses have revealed the devastating consequences that inheritance tax reforms will have. They warned 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. A UKHospitality member survey revealed 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 both its Budget submission and evidence to the House of Lords Economic Affairs Finance Bill Sub-Committee inquiry on the issue, UKHospitality has called 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 agricultural property relief and BPR to safeguard productive capital and generational continuity. UKHospitality chair Kate Nicholls said: “These reforms are flawed in design, rushed in process, and unfairly target small and medium-sized family businesses. 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.” Simon Collinson, director of the 17-strong Oak Taverns, said: “Our business was set up in 1991 and is still currently owned by our parents, both now in their eighties. It is now operated by a second generation of me, my brother and sister. We have invested heavily in freehold pubs over the years on mostly closed, failing and under threat pubs in villages and small market towns. We have given back communities their local pub and created jobs in the process. Following the new rules, the focus is no longer on growth but trying to decide which of our great pubs we will have to sell to pay the tax bill. No one ever bought a small or medium-sized pub company to avoid inheritance tax by passing it down to another generation. We would urge the government to reconsider its reforms to BPR, which would be devasting for many family-run hospitality businesses.” Paul Milsom, managing director of the three-strong Milsom Hotels, said: “I believe the government’s approach is incredibly short-sighted. While we understand the need for increased revenue, to put 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.” Elyse Waddy, owner and director of The Empire Hotel, Llandudno, said: “This policy ripped my heart out – all my life I have worked with the goals of preserving and improving my family business to pass on to the next generation. Now that is all for nothing. Why did I invest, cherish and sweat for it to be stolen from me just because I will have the misfortune to die. I have been a good employer and looked after my staff, supported local suppliers and tradesmen, helped the local community and paid all my taxes so in essence did all that was asked but my business will cease when I die. I will not allow the business to continue with that tax debt around its neck as it is just not a sustainable option.”
Family-owned hotel group falls to loss due to ‘challenging economic environment’: Family-owned Greenclose Hotels has reported it fell to a pre-tax loss of £586,806 for the year ending 31 October 2024 compared with a profit of £474,763 the previous year due to the “challenging economic environment. Turnover was down slightly to £16,443,470 from £16,533,804 the year before. Gross margin percentage increased to 45.7% from 45.4%. The company now operates the Montagu Arms Hotel in Beaulieu in Hampshire and the Imperial Hotel in Llandudno in Wales having sold Careys Manor Hotel and Senspa in Brockenhurst, Hampshire, to Indian group Myst Hotels & Resorts, part of the SanRaj Group, in March this year for an undisclosed sum. In his report accompanying the accounts, Greenclose Hotels director John Leach said: “While the covid-19 pandemic seems some time ago, the longer-term economic impact that it, combined with Brexit and the war in Ukraine, are significant on the hospitality sector and on the UK economy as a whole. The shortage of labour created by Brexit and compounded by covid-19 is still being felt, coupled with what has been a highly inflationary economy. This will continue to put pressure on the company's cost base, along with a considerable uplift in minimum wage. Nevertheless, there are opportunities to generate upside and a greater focus on the wellness market will assist greatly. In light of these and other future uncertainties, our continued focus is to make the businesses more agile, flexible and efficient, investing in market leading technology wherever possible, in order to maximise profitability and cash reserves throughout the coming few years. This focus on efficiency, which we expect to have no negative impact on the guest experience, coupled with our continuing commitment to providing excellent customer service, high quality facilities, and actively maintaining and improving our hotel properties, will help us maintain our market leading position into the future in each of the company's locations.” No dividend was paid (2023: £1,174,076). Greenclose Hotels features in the Premium Club Turnover & Profits Blue Book, which is available exclusively to Premium Club subscribers and features 1,177 companies. Greenclose Hotels’ turnover of £16,443,470 is the 637th highest in the database. Companies can now have an unlimited number of people receive access to Propel Premium for a year for £995 plus VAT – whether they are an operator or a supplier. The single subscription rate is £495 plus VAT for operators and £595 plus VAT for suppliers. Email kai.kirkman@propelinfo.com to upgrade your subscription.
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