In the weeks following the budget announcement, the business sector has expressed strong concerns, focusing primarily on two major issues. One of the most prominent responses has been a wave of discontent from some of the UK’s largest employers regarding the rise in employers’ national insurance contributions (NICs).

As someone at the helm of a significant employer with a UK payroll totaling £200 million, I empathize with this frustration. Nonetheless, I also recognize the government’s challenges and the significant strains on public services. The ongoing political discourse surrounding a £22 billion fiscal deficit might seem less pertinent; the pressing reality is that the nation is in a precarious financial situation, requiring adjustments.

The immediate effects of the NICs hike are likely to be temporary. Companies may witness suppressed wage growth, increased prices, and reduced profits in the short term. However, it is anticipated that businesses will primarily bear these costs next year, and given recent trends in wage adjustments and product pricing, an effective increase of 2.5 percent in NICs will likely stabilize across the economy relatively swiftly.

Conversely, the proposed alterations to business and agricultural reliefs pose a more significant threat. Plans to eliminate half of the inheritance tax relief for enterprises and farms valued over £1 million could have severe repercussions for many businesses that serve as vital components of the UK economy.

The existence of family-owned businesses and farms may be jeopardized, as many will struggle to accommodate the increased tax burden and could be forced to sell.

The recent budget introduced a staggering £40 billion in tax hikes, while the removal of business and agricultural reliefs has emerged as a critical concern, constituting just 1 percent of the total tax increase yet igniting widespread protest. This serves as a strong signal to the government that the issue requires immediate attention.

Farmers are organizing large-scale protests this week, fueled by escalating worries about the viability of family-run farms. Despite government assurances that most farms will remain unaffected, these proposed changes extend beyond a single fiscal year, impacting the future of generations. The government has relied on data from a single year to justify its stance, leaving many farmers and future business owners facing uncertain prospects.

Most family businesses lack the cash reserves to cover inheritance tax liabilities and may need to resort to dividend payments, which carry a hefty tax burden of nearly 40 percent. This situation effectively nullifies the relief, pushing families toward the difficult decision to sell.

While farmers’ challenges are more widely recognized, family businesses across the UK are equally impacted. The family business organization Family Business UK (FBUK) estimates that 85,000 family enterprises transition to the next generation yearly, highlighting that business relief is crucial for a seamless transfer.

In the UK, 5.6 million individuals are privileged to build businesses, with over 260,000 companies employing ten or more people. Out of these, around 38,000 private companies employ at least 50 individuals, collectively accounting for 14 million jobs, approximately half of the private sector’s workforce. The adjustments to business relief will affect the majority of these enterprises.

Amidst a growth-oriented agenda, why would the government undermine the determination and potential of such a significant portion of the workforce? These changes threaten family-owned businesses’ legacy and impede the development of communities throughout the nation.

In my capacity as deputy chairman at FBUK, I have spoken with numerous family business owners recently. Initially, their reaction is one of anger, but that quickly morphs into fear—fear for their livelihoods, fear for their companies, their families, their staff, and their ability to meet future financial obligations.

The most significant impact is on older business proprietors who previously felt no urgency to transfer ownership due to established business relief protections. With little notice and inadequate preparation time, those safeguards have been eliminated. Individuals in their 70s and 80s may wonder if they can satisfy the seven-year inheritance tax rule to pass on their businesses before passing away, avoiding crippling tax liabilities. For some, this will force the sale of their life’s work, transferring ownership to private equity or international firms.

Family business owners are not driven by greed. In my own firm, the majority of our wealth is retained within the company, and we have chosen to forgo dividends to reinvest. This strategy has enabled us to double our workforce to 9,000 over the last decade, representing a success story that I believe the government should support and strive to replicate.

While my company may not represent the average size of family businesses, it mirrors the values of many I interact with. Our focus remains on serving our customers, nurturing our communities, supporting our employees and their families, and contributing to charitable causes. We offer the continuity and patient capital that the UK economy needs amid political uncertainties.

In light of these developments, I urge the government to re-evaluate the impacts of this legislation. A comprehensive assessment of the implications of the changes to business and agricultural reliefs is essential. While we may weather the immediate challenges, it is the protection of our businesses and farms that will ultimately foster sustained growth and prosperity for the UK.

Steve Rigby is co-chief executive of Rigby Group, a family-run technology firm, and a board member of Family Business UK.