Labour’s inheritance tax raid hurts all family businesses, not just rich farmers
Family businesses like mine are the lifeblood of the economy, but Labour’s inheritance tax changes will break them apart, writes Nick Showering
Showerings is a family business that has been making cider in Somerset for 180 years and was incorporated as a private company in 1932. Many generations of my family have devoted their professional lives to the business, and I’m privileged to be part of the legacy.
We employ 350 people, all of whom we consider part of our family and, as a family business and unlike private equity-backed or publicly-listed companies, we take a long-term view. Our name is above the door and with that comes a responsibility to think carefully about the legacy we are creating, not only for our business but also for our local community and future generations.
Family businesses like ours make up over 90 per cent of companies in the UK and employ over half the workforce. Which is why Chancellor Rachel Reeves’ changes to business property relief, introduced in 1976 by another Labour Chancellor, Denis Healey, who wanted to protect family businesses, are so hard to understand.
Her changes mean an increase in inheritance tax from zero to 20 per cent on all assets worth over £1m from April 2026. We’ve heard a lot about the impact on family farms but much less about the far bigger hit to other family businesses. This will drag millions of medium-sized family companies into the inheritance tax net, and the reality is that many people inheriting a business from the previous generation won’t be able to afford the tax bills that will result, so family companies will be broken up or sold. In many cases, shareholdings will have to be sold, fundamentally changing the ownership structure and culture of decision-making. Foreign business owners operating in the UK will avoid the tax, which is profoundly unfair. The change is only forecast to raise £500m a year, and Family Business UK estimates it will lead to 208,000 job losses, meaning an overall £1.9bn hit to the Treasury.
When family companies are the lifeblood of the economy, this policy doesn’t make sense. Any government focused on growth should be doing all it can to help them flourish.
When life gives you apples…
England is coming to the end of this year’s apple harvest and it’s looking like a record-breaking crop of super-sweet fruit.
We are expecting a harvest of up to 3,000 tonnes of apples, compared to the 1,000 tonnes collected last year. The prolonged periods of hot sun over the summer have produced what promises to be an outstanding vintage, unlike any we’ve seen before.
…make sparkling cider
It’s an exciting time for Showerings cider as we are now available in 95 Waitrose stores. Sales of upmarket ciders are booming while much of the drinks sector is seeing flat or falling demand. We have seen 51 per cent growth in sales volumes this year as the cider category as a whole flatlined. Consumers are increasingly prepared to pay more for a refined, triple vintage cider like ours and the UK’s leading sommeliers are recognising the quality and distinct taste profile which, like fine wine, can be paired with food.
A foodie hotspot in North London
Cinder in Belsize Park (it has another outpost in St John’s Wood) is a new favourite restaurant. From a young age chef Jake Finn was always fascinated with fire. This childish curiosity grew into a respectful passion for cooking over flames. He sources wonderful ingredients, and everything is ‘kissed’ by the fire.
What I’ve been reading
I recently read The Zulu Principle by Jim Slater, which offers an insightful approach to understanding and analysing growth stocks, as well as business operations. For me, it’s been a valuable resource in assessing the strengths and weaknesses of our own business. While the book is primarily geared to investors looking to identify growth stocks, it is equally relevant for business owners.
Nick Showering is director of Showerings cider