In this compelling episode of The Cashflow Show, host Clayton M. Coke sits down with Steve Rigby, co-CEO of Rigby Group PLC and Chair of Family Business UK, to unpack the alarming consequences of proposed inheritance tax reforms. With a new Family Business UK report predicting 208,000 job losses and a £15 billion drop in economic activity, Steve reveals why these changes threaten the backbone of the UK economy—family businesses. From their critical role in regional economies to strategies for resilience, this episode is a must-listen for business owners and policymakers navigating an uncertain future.
Key Discussion Points:
- Rigby Group & Family Business UK: Steve shares insights into Rigby Group’s 50-year legacy as a second-generation tech business and his role as Chair of Family Business UK, advocating for the sector’s 4.7 million jobs and £985 billion economic contribution in 2023.
- Inheritance Tax Reforms: A Family Business UK and CBI Economics survey of 4,000 businesses highlights the devastating impact of proposed changes to business property relief (BPR) and agricultural property relief (APR), projecting 208,000 job losses and £15 billion in economic losses.
- Regional Impact: The reforms disproportionately affect regions like Cornwall and the Northeast, where family businesses are major employers in economically challenged areas.
- Anti-Growth Measures: Steve discusses how the reforms force businesses to plan for uncertain tax liabilities, stifling investment, acquisitions, and job creation.
- Sector-Specific Effects: Industries like construction, hospitality, and retail face significant risks, with businesses hoarding cash due to economic uncertainty.
- Resilience Strategies: Steve emphasizes the importance of family businesses communicating internally and leveraging networks like Family Business UK to navigate these challenges.
Key Takeaways:
- Family businesses, contributing £985 billion to the UK economy in 2023, are vital to national and regional prosperity but face existential threats from inheritance tax reforms.
- The proposed changes to BPR and APR could lead to a £15 billion economic hit and 208,000 job losses, particularly in vulnerable regions like Cornwall and the Northeast.
- Businesses are forced into anti-growth measures, saving cash to cover future tax liabilities instead of investing in growth, acquisitions, or hiring.
- Family businesses must engage in proactive communication and leverage networks to build resilience against policy changes.
- The government’s lack of impact analysis on these reforms underscores the need for business leaders to advocate for change, as highlighted by Family Business UK’s comprehensive report.
Notable Quotes:
- “Family businesses are the middle lane of the economy—they think in decades, not quarters, and that long-term perspective is critical.” – Steve Rigby
- “This legislation captures the wealth creators of the country, and at a time when growth is on the agenda, it’s an anti-growth measure.” – Steve Rigby
- “Stand up and be counted. We need more business leaders talking to government about the importance of our regions.” – Steve Rigby
Actionable Insights for Businesses:
- Review Tax Exposure: Assess your business’s vulnerability to inheritance tax changes, especially if assets exceed £1 million, and plan for potential liabilities.
- Engage in Advocacy: Join organizations like Family Business UK to amplify your voice and influence policy changes through collective action.
- Strengthen Internal Communication: Establish a steering group within your family business to discuss succession planning and tax mitigation strategies.
- Leverage Networks: Tap into entrepreneurial networks like Family Business UK or The Entrepreneurs Network for resources, support, and collaborative solutions.
- Stay Informed: Download the Family Business UK report to understand the regional and sector-specific impacts of the reforms and prepare accordingly.
Resources:
- Family Business UK Report: FBUK Website – Download the full report for MP-by-MP breakdowns and economic impact details.
- Rigby Group PLC: Rigby Group Website – Learn more about their 50-year legacy in technology.
- The Entrepreneurs Network: TEN Website – Connect with resources for business growth and resilience.
- CBI Economics: CBI Website – Explore their economic research and advocacy efforts.
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