Britain’s oldest wine service provider blasts Labour over inheritance tax raid on household companies

The boss of Britain’s oldest wine merchant has warned that Labour’s inheritance tax raid on family firms is ‘a very real threat to the future success of the business’.

Lizzy Rudd, chairman of Berry Bros and Rudd, said the government ‘should be encouraging us to invest’ rather than hammering companies with yet more costs.

And she accused ministers of failing to ‘understand’ business.

Berry Bros and Rudd chairman Lizzy Rudd

The comments came as family firms and farms face paying death duties of 20pc from next month following changes to agricultural property relief (APR) and business property relief (BPR).

The plans – outlined by Rachel Reeves in the 2024 Budget – will be tested in court in a judicial review next week following fierce protests by campaigners.

Rudd said: ‘As a 327-year-old family business, we have always strived to be stewards for future generations. We also place great value on employing people, considering the wider community and the environment in all that we do.

‘How are we expected to continue to build value for the long term when our children will one day have to pay inheritance tax on this value – a value which is on paper and not in our pockets unless business assets or the business itself is sold?

‘Changes to inheritance tax are a very real threat to the future success of the business. In addition to the higher costs of operating right now, these changes are an additional burden for family businesses at the very time the Government should be encouraging us to invest.

‘This tax will drive behaviour that I don’t believe the Government really want, neither does it really understand the principles on which we operate.’

A judicial review will be held into the government’s proposed changes to inheritance tax rules on March 17 and 18 at the Royal Courts of Justice.

The case will be heard by a panel of judges, rather than a single High Court judge, in a move that lawyers said ‘underscores its importance’.

The hearing comes after Rachel Reeves refused to cancel the tax raid in the Spring Statement despite months of protests that have seen convoys of tractors driven through central London.

Campaigners described it as a ‘missed opportunity’.

The famous Berry Bros and Rudd shop on St James’s Street in central London

In her Budget in 2024, the Chancellor announced changes to agricultural property relief (APR) and business property relief (BPR) that left family farms and firms facing inheritance tax of 20 per cent on assets worth over £1million from this April.

She later raised the threshold to £2.5million, or £5million for married couples, in a pre‑Christmas U‑turn.

But the move has not eased concerns across the sector – raising the stakes ahead of this month’s judicial review.

James Austen, a partner at law firm Collyer Bristow, which is acting for the farmers and businesses, said: ‘The listing of this case before a Divisional Court underscores its importance, as does the urgency with which the court will now hear it.

‘The issues raised in this judicial review are profound: they concern the standards by which Government should have consulted before implementing reforms with profound consequences for families and businesses across the country.’

The Office for Budget Responsibility said it now expects that change to reduce inheritance tax receipts by £100million a year. 

Reacting to the Spring Statement, Fiona Graham, chief operating officer at campaign group Family Business UK, said: ‘For Britain’s family businesses today represents another missed opportunity for government to give them its full support and reverse the changes to inheritance tax.’

She added: ‘The eyes of all family businesses are now firmly fixed on next month when the changes to inheritance tax are due to take effect. For them, the family business tax remains another cost they must plan for which will drain investment from the company and limit the creation of new opportunities for workers.

‘The forecast from the OBR repeats the uncertainty of how family businesses will respond to the tax. Our evidence indicates that the reforms will further reduce employment, weaken investment and productivity growth, and lead to a fiscal loss to the Treasury.

‘If the Government is serious about reversing these trends it must properly incentivise Britain’s five million family businesses and reverse the family business tax.’