𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

Rachel Reeves has been warned that her Budget has “intensified the cliff edge” facing family firms next April, as she did not reverse her position on “damaging changes” to business property relief (BPR). The Chancellor announced last year a £1million allowance on the value of assets that can qualify for 100% business property relief (BPR) and agricultural property relief (APR) from April 6, 2026. The Government said on Thursday that the £1million allowance will apply to the combined value of property in an estate qualifying for 100% business property relief or 100% agricultural property relief or both.

Relief at the lower rate of 50% will apply to the value of any qualifying relievable property over £1million, and any unused amount of the new £1million allowance can be transferred to a surviving spouse or civil partner. But Steve Mulholland, Chief Executive Officer of the Construction Plant-hire Association (CPA), remains unsatisfied.

He said: “Our industry needed a Budget that backed builders. Instead, the Chancellor has turned the other way.

“Over 80% of CPA members now fear they will struggle to pass their business to the next generation.

“These are not abstract numbers, but real companies providing the machinery that build Britain. Undermining their future undermines the country’s future.”

The expert added that Labour’s target of delivering 1.5million new homes is “now under fresh strain”, as 76% of members expect investment in new equipment to fall, and two-thirds expect cuts to staff and apprenticeships because of the inheritance tax reforms.

Mr Mulholland said: “The industry needs around 250,000 additional workers every year just to meet infrastructure demand. You cannot build more homes by weakening the businesses and jobs that deliver them.

“This was the moment to support the firms at the frontline of Britain’s growth ambitions. Once again, the Chancellor has failed to deliver.”

Even though funding SME apprenticeships for under-25s is “welcome”, it does not come close to the scale of the challenge, the Chancellor has been warned.

Mr Mulholland detailed that construction employs around 10% of the UK workforce, yet accounts for 15% of all insolvencies, with unemployment having risen by 282,000 over the past year.

He said: “Family-run firms cannot hire at the pace Britain needs when their cost base is already being squeezed by last year’s business property relief changes and rising employer taxes.”

The introduction of a 40% first-year allowance is a “small but important win for our sector”, the specialist said, as it gives firms the ability to claim a significant portion of tax relief upfront when buying new equipment, improving cash flow at the point of investment.

Mr Mulholland added: “The CPA has been calling for measures that support reinvestment, and while this doesn’t solve the wider challenges facing the industry, it is a small step in the right direction.

“However, the Chancellor’s decision not to reverse last year’s damaging Employer National Insurance hike will continue to choke construction employment across the country.

“The warning signs are already flashing red.”

He said Ms Reeves “chose to tighten the screw”.

Mr Mulholland added: “Materials output is at a 75-year low.

“SMEs are struggling to invest in equipment, apprentices and safety-critical training. Piling higher employment costs on top of this is a recipe for fewer jobs, delayed projects and weakened capacity across the supply chain.

“If the Government wants Britain to build, it cannot keep taxing the businesses that do the building. Today was the moment to back jobs, apprenticeships and growth.

“Instead, the Chancellor has looked the other way.”

Officials say the rate of business property relief available will be reduced from 100% to 50% in all circumstances for shares admitted to trading on recognised stock exchanges designated as “not listed”.

In addition, the option to pay inheritance tax by equal annual instalments over 10 years interest-free will be extended to all property which is eligible for agricultural property relief or business property relief, and a £1million allowance will also apply to the combined value of relievable agricultural and business property in trusts.