15,000 jobs at risk from UK inheritance tax changes

The Herald Scotland

18-06-2025

The Herald can reveal that 7,353 jobs could be axed across Scotland's seven cities, at a financial loss of £589.3 million to the country.
In Glasgow, that amounts to 2,854 jobs and £205.8m, and 2,018 jobs and £180.6m in Edinburgh.
More than 1,200 jobs could be lost in Aberdeen in the coming years, with an economic impact worth £108.1m.
The report also revealed the Aberdeen North and South were the worst of UK parliamentary constituencies in terms of Gross Value Added (GVA), with £52.7 million and £55.4 million at risk.
Aberdeenshire North and Moray East was the other Scottish constituencies to feature in the 10 areas most at risk for economic impact per percentage of local GVA, at losses of £23.7m.
But jobs are at risk across Scotland, including 261 in Alloa and Grangemouth and 182 full-time equivalent in Falkirk – two regions which have already been hit by job losses following the closure of the last remaining oil refinery and bus manufacturer Alexander Dennis.
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The UK Government announced a 20% inheritance tax on firms, including construction and agricultural businesses, from April 2026.
There is no changes to the first £1m of assets, however changes to agricultural and business property reliefs placed be halved to 50%, with firms telling The Herald the damage could be catastrophic for family businesses.
The UK Government has described the changes, announced by the Chancellor last year, as 'fair and balanced'.
However, Steven Mulholland, chief executive of the Construction Plant-hire Association, told The Herald: 'These figures paint a stark picture of the damage inheritance tax changes could do to Scottish family run businesses – particularly in critical sectors like construction, where firms are often asset-rich but cash-poor.
'For many, these changes won't just mean a bigger tax bill – they could spell the end of the road altogether, putting 200,000 jobs £15bn in UK economic activity at risk.
'Family businesses are the backbone of the Scottish economy. They invest locally, provide jobs, and are integral to the fabric of our communities.
'If the government is serious about economic growth and levelling up, it must urgently rethink this policy before irreversible damage is done – especially when firms are ready under pressure from recent job losses driven by the national insurance increase.'
Murdo Fraser, economy spokesman for the Scottish Tories, said: 'This shows the immense damage that Labour's vicious tax changes will do to small businesses.
'It was already clear that the vindictive family farm tax was a death-knell for thousands of farms. These figures show that other family businesses will be badly hit, and thousands of jobs are at risk.
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'Small and medium-sized firms now face an existential threat, especially when they have to contend with Labour's national insurance tax on jobs and the SNP's higher tax rates.'
The UK Government has said payments required from the changes to business and agricultural property reliefs can be spread across 10 years.
A spokesman told The Herald: 'Our reforms to Agricultural and Business Property Reliefs will mean three quarters of estates will continue to pay no inheritance tax at all, while the remaining quarter will pay half the inheritance tax that most estates pay, and payments can be spread over 10 years, interest free.
'This is a fair and balanced approach which helps fix the public services we all rely on.
'Capping the rate of corporation tax, reforming planning, establishing a national wealth fund and creating pension megafunds is part of our Plan for Change to get Britain building, unlock investment and support business so we can raise living standards and make all parts of the country better off.'
The report by Family Business UK estimates that 200,000 jobs across the UK could be lost with the changes, with £15bn at risk.
The report surveyed more than 4,147 family businesses and farms across the UK, with the organisation's chief executive Neil Davy warning of 'widespread impacts'.
However, the report warns of specific vulnerabilities at a regional level, with as much as 80% of Scotland's land mass under agricultural production.
Exports of the food and drink sector in Scotland alone are worth £5 billion per year.
The report said: 'Policy changes affecting this sector will, therefore, have outsized repercussions in the country and three Scottish constituencies feature amongst the top 10 affected by GVA in the UK.
'Numerous business owners told us that they will have to slow or reduce investment because of the changes.'