House Of Lords Report Criticises Lack Of Consultation On APR/BPR

The House of Lords Economic Affairs Committee has published its findings into 'Inheritance Tax Measures: Unused Pension Funds And Agricultural And Business Property Reliefs' and the report criticises the lack of consultation undertaken prior to the initial announcements on APR and BPR in the Autumn 2024 Budget.

The Government has faced strong lobbying and campaigning on the topic and in December 2025 announced a revision to the rules with limits increasing from £1 million to £2.5 million per individual but family businesses are still at risk and we will continue to campaign on their behalf for a detailed consultation and reversal of the policy.

The report from the sub committee criticises the lack of consultation and the full report can be read here

In particular the report comments on the specific areas as outlined below:

APR and BPR reforms

117. It is disappointing that the Government announced these reforms in the 2024 Budget without undertaking a prior consultation on how to reform APR and BPR, setting out its policy objectives clearly. This is particularly the case given that the reforms are to an area of taxation that has existed in its current form for over 30 years, and in relation to which many taxpayers will have made long-term decisions. (Paragraph 376)

     
     

118. Engagement with relevant stakeholder organisations should have begun much earlier to enable a more effective policy-making process. It may have also helped to reduce the level of uncertainty, confusion and worry felt by those who will be impacted by the changes, and avoid the need for significant changes to the original proposal only months before the reforms came into effect. (Paragraph 377)

     
     

119. Although the APR/BPR Consultation provided an opportunity for stakeholder engagement, it was too narrowly focused on technical details to give stakeholders a meaningful opportunity to comment on broader issues. (Paragraph 378)

     
     

120. Although we welcome the fact that HMRC has subsequently engaged with key sector stakeholders, we are concerned that those stakeholders feel their concerns have not been listened to. (Paragraph 379)

     
     

121. Given that the reforms are now less than three months away, HMRC should, as a priority, establish a working group with relevant professional and business bodies to address their concerns and clarify how the policy will operate in practice, so as to minimise practical uncertainties for those affected and reduce the risk of unintended consequences. (Paragraph 380)

The Tax Policy Making Principles:

122. We are disappointed by reports that there was a lack of meaningful consultation with relevant stakeholders in the development of the Principles. As a result, we are concerned about the lack of clarity as to why the Government considered it necessary to withdraw the Framework, rather than simply update it. (Paragraph 390)

123. The Government should set out the steps it will take to keep the Principles under review. Such steps must include actively engaging with relevant stakeholders to ensure their views on the operation and the appropriateness of the Principles are properly taken into account. (Paragraph 391)

124. We appreciate the need in certain circumstances for speed in policy development. However, we are concerned that under the Principles, the Government may pursue speed to the detriment of effective policy that has been subject to meaningful consultation. (Paragraph 398)

125. The Government must not move away from the principle that open and public consultation serves a useful and important purpose in developing effective tax policy. (Paragraph 399)

     
     

126. Our findings in previous chapters about the Government’s approach to consultation on measures examined in this report appear to bear out the issues raised by witnesses about what the Principles will mean for consultation on tax policy in the future. (Paragraph 400)

127. The Government should adopt the presumption that there should be a formal public consultation, generally at an early stage, on tax policy, unless there are specific reasons against this. Where the Government decides against a formal public consultation, it should publish this decision and explain why. (Paragraph 401)

128. Agile consultation, including where it involves private meetings with stakeholders, need not lack transparency. The Government should publish information about who they have consulted for specific measures. (Paragraph 402)

129. Effective engagement with academics on tax policy can bring valuable insight into the policy making process. (Paragraph 404)

130. Given the statement of intent in the Principles, the Government should set out what steps they are taking to engage with academics on tax policy development. (Paragraph 405)

131. Providing details about the data sources used to develop a particular policy, and publishing the data itself, can help ensure stakeholders can contribute to good policy development. (Paragraph 408)

132. In order to model the impact of proposed tax reforms effectively, it is important that the Government has access to good data. It is concerning to hear that this may not always be the case. (Paragraph 409)

133. The Government should be proactive in sharing the data it is using to make policy decisions in a timely manner, at an early stage of policy development. (Paragraph 410)

     
     

134. The Government should carry out a review of the data sources it uses in evaluating and measuring tax policy changes and take appropriate steps to ensure that the data it uses is not only reliable, but the best data available. (Paragraph 411)

     
     

135. The Government should set out how it intends to assess whether the principles have been complied with when developing new policies. (Paragraph 415)

     
     

136. The Government should carry out a review of the operation of the Principles following the 2026 Budget. The review should engage with tax professional bodies and other relevant organisations to obtain their input into the operation of the Principles in practice. (Paragraph 416)

As Paul Andrews, Founder and CEO of Family Business United explains, "We welcome the findings of this report and the fact that it highlights some of the areas of concern that the family business community have been campaigning to address."

"We also welcome the revisions to the policy announced in December but for Britain's larger family firms, many of them multigenerational that have been investing in growing their businesses for generations, the changes reduce the impact to a degree but will not remove what will remain as a large inheritance tax liability going forward."

"We will continue to support a full review of the policy and campaign for it to be fully reversed so that family farms and businesses can focus on growing their businesses and continuing to make a significant economic contribution to the UK economy."