Changes to inheritance tax stand to affect 71% of coach operators, and 46% of those businesses believe that the amendment “threatens the viability of their companies,” according to research carried out by the Confederation of Passenger Transport (CPT).
Under the policy announced at the October budget, family businesses with assets of more than £1 million will be subject to inheritance tax for the first time under alterations to business property relief.
CPT points out that around 85% of small- and medium-sized coach operators in Britain are family owned. Many own their operating centres in addition to vehicles, which can be worth more than £300,000 each. Most coach operators are thus within the threshold for the revised inheritance tax approach.
Engagement work by the Confederation has shown that “several” of those have already put on hold plans for expansion, including purchase of new vehicles and property, because of the change announced by Chancellor Rachel Reeves.
CPT claims that Ms Reeves’ policy on inheritance tax puts the long-term viability of some coach operators under threat. The trade body recently demonstrated the multi-billion-pound economic impact the coach industry has each year.
Director of Policy and External Relations Alison Edwards has described as “disappointing” Ms Reeves’ decision to make the change “with so little warning or consultation, prompting members to reconsider investment plans.”
CPT is urging the Treasury to think again about the policy. Ms Edwards adds that many of the operators that will be impacted “are long-established local businesses that have been painstakingly built up over several generations,” and that they are run by “entrepreneurial families with much of their net worth tied up in garages, land and vehicles.”
She notes that after a highly damaging pandemic period, coach operators will ultimately need to spend “hundreds of millions of pounds” on decarbonisation.
“So it is perplexing that the government is discouraging investment with the prospect of hefty and unaffordable inheritance tax bills, in addition to a rise in national insurance contributions.”
