UK Family Businesses Need Certainty From The Budget

As the government counts down to the 26 November Budget, leaders of the UK’s five-million-strong family business community are experiencing a familiar, but increasingly intolerable sensation: uncertainty.

In recent weeks, the constant media coverage of floated tax proposals, quiet back-pedals and ministerial ambiguity has left even the most resilient family-owned firms on edge. For businesses built on long-term stewardship, generational planning and deep local roots, the stop-start nature of policymaking has become more than a frustration — it is now a drag on investment, confidence and growth.

“Family firms are used to navigating volatility in markets,” says Paul Andrews, CEO of Family Business United.

“What they cannot work with is uncertainty in policy. When the goalposts keep shifting, planning and decision making becomes almost impossible.”

The past month has brought a blur of announcements: potential income tax and dividend tax increases, whispers around alterations to Business Property Relief, hints at further business rates reform, and just as often, quiet retractions or ‘clarifications’.

For the average family firm, this isn’t just political chess. It’s the difference between hiring or freezing recruitment, investing or conserving cash, passing on the business or postponing succession.

“As soon as speculation starts around dividend tax rises or tweaks to inheritance measures, family businesses feel it instantly,” he adds. “Many owners take remuneration through dividends which is how people pay their mortgages. When that becomes uncertain, everything does.”

Long-promised reforms to business rates, particularly the cliff edges that punish expansion, remain maddeningly opaque. For high-street family firms, hospitality groups and local manufacturers, these details matter.

“There’s a world of difference between a government saying ‘we’re reviewing it’ and actually putting a roadmap on the table,” continues Paul. “Family firms are agile, but they’re not clairvoyant.”

Across the business landscape, confidence indicators have been sliding. Rising input costs, labour shortages and a fragile consumer environment were challenging enough, but uncertainty at a policy level has magnified the strain.

Family firms, often reinvesting profits instead of relying on external finance, are particularly sensitive to unclear tax horizons. Many have already delayed capital expenditure, postponed leadership transitions, or shelved regional expansion plans until the Budget is delivered.

“Every week of uncertainty is a week where decisions are deferred,” Andrews says. “And when decisions are deferred, growth is delayed. It’s as simple as that.”

A defining feature of family enterprises is their time horizon: decades, not quarters. That is why unpredictable policymaking hits them harder than most.

As Paul adds, “Family businesses are the bedrock of local economies. They plan in generations. Government often seems to plan in news cycles.”

This misalignment matters because family businesses are uniquely placed to drive sustainable growth. They provide long-term employment, invest in training, and keep profits circulating within the local community. But they can only do this confidently when the policy environment is consistent.

What the Sector Needs — and Needs Now

As Budget Day approaches, the family business world is united in its call for three key ingredients:

1. Certainty

Clear, predictable tax policy, not rumour-led or reactionary shifts.

Clarity on the future of Business Property Relief and inheritance tax thresholds.

A firm, actionable timeline for business rates reform.

2. Direction

A cohesive business strategy that places family enterprises at the heart of the UK’s growth mission with support that is easy to access and aligned across departments.

3. Genuine Support for Growth

Investment incentives that reward reinvestment, innovation and job creation and long-term thinking on regional development, supply chains and infrastructure.

As Paul continues, “If government wants growth, it has to give businesses something to grow from. Right now, family firms need fertile soil, not shifting sands.”

With the Budget only days away, optimism within the family business community is cautious but not extinguished. There is recognition that the Treasury must make tough choices, but also a belief that a respectful, collaborative approach could restore confidence and consultation on key areas of concern would be welcome, notably around Business Property Relief and the impact on generational transitions within family firms.

The opportunity ahead is significant. Family businesses account for more than half of private-sector employment and contribute trillions in turnover. A budget that gives them clarity, stability, and a clear growth path would do more than support individual firms, it could unlock a major driver of national prosperity.

“Family businesses want to invest. They want to hire. They want to pass their companies on in better shape than they inherited,” Andrews says.

“Give them certainty with policies that support long-term generational investment for them and they’ll do the rest.”