Emma Reynolds, the chief secretary to the Treasury, has urged entrepreneurs not to be put off by inheritance tax business relief changes, telling founders the UK remains a strong place to build and grow a company. The minister made the comments during a visit to Numatic International, the makers of the Henry vacuum cleaner, where she praised the country’s economic fundamentals while declining to offer any firm reassurances on Budget measures.
Reynolds acknowledged that businesses were concerned about the cost of doing business but argued that Britain had ‘very big strengths’ and that the government wanted more successful companies to start up in the UK and employ thousands of people.
G7 growth cited as Reynolds defends inheritance tax business relief position
The minister drew on recent economic data to support her case. ‘Yes, we want to see more growth across the country, but we’re starting from a good place,’ she said. ‘We’ve got the highest growth in the G7, and we’re cutting the deficit more quickly than any other G7 country. Business investment is up, consumer confidence is up.’
The UK did hold the highest growth rate among G7 nations in the first half of the year, at about one per cent. However, GDP is expected to slow sharply in the second half of the year, a caveat the minister did not address directly in her remarks.
When pressed on whether founders and investors could expect any relief from the upcoming Budget, Reynolds was direct: she could not offer them ‘any reassurance on the Budget’. She described the early Budget timetable as necessary to reduce speculation, which she said was often ‘inaccurate and unhelpful’.
How the reliefs currently work, and what changes from April 2026
Under the existing inheritance tax framework, business property relief provides a degree of protection for owners of qualifying firms. The first £2.5m of qualifying business property is 100 per cent tax-free per person. A 50 per cent relief applies to amounts above that threshold, as well as to AIM-listed shares and some land or machinery used by businesses. Certain allowances can also be passed between couples free of inheritance tax.
Despite those protections, businesses have long argued that a substantial tax bill still falls on those who inherit business assets, particularly where the value of a firm is tied up in property or plant rather than liquid holdings.
The threshold has not always stood at £2.5m. According to GOV.UK, the combined Agricultural and Business Property Reliefs threshold rises to £2.5m from April 2026, up from the previous £1m limit. The change is intended to provide greater protection for family-owned farms and businesses, though entrepreneurs and trade groups are watching closely to see how the full Budget package will sit alongside it.
Reynolds’s visit to Numatic’s Somerset site was partly aimed at sending a signal that the government views mid-sized manufacturers as central to its growth agenda. ‘We know that businesses are worried about the cost of doing business and the Chancellor is focused on what more we can do in government to unleash the potential of companies like Numatic, medium-sized companies, as well as the small and large businesses across the country,’ she said.
The minister also pushed back against the idea that the Treasury itself is an obstacle to growth, after some of its responsibilities for delivering economic gains were transferred to Number 10 North. ‘I disagree that the Treasury is a growth inhibitor,’ she told The Times. ‘We, as a department, have two big responsibilities. First, to drive growth in every postcode; second, to ensure that we stabilise the economy and maintain the stability of the public finances as well. We have to do both of those things, and we’re very acutely aware of that.’
The April 2026 increase in the inheritance tax business relief threshold will be the first concrete test of whether the government’s words on supporting founders translate into a lasting structural change for family-owned businesses.
