Britain’s family-run coach companies have been left reeling from the government’s changes to inheritance tax, a top transport lobby group has said, adding that many have been forced to urgently reevaluate their investment plans.
Some 71 per cent of coach firms said they would be impacted by the inheritance tax changes, with 46 per cent warning the overhaul threatened their long-term viability, according to a survey of 375 firms by the Confederation of Passenger Transport (CPT).
Changes announced by Rachel Reeves in the Autumn Budget mean that family businesses with assets over £1m will, for the first time, be subject to inheritance tax.
Reeves’ inheritance tax changes have already drawn the ire of British farmers, with thousands protesting in London this week in opposition to the shake-up. But the CPT is warning that coach companies will also be hit by the overhaul.
While there are a handful of national coach companies, around eight in ten small and medium-sized coach operators in Britain are family-owned.
The coach industry is highly capital intensive, with most operators owning assets above the new threshold. Land for parking, garages and the vehicles themselves can incur costs of more than £300,000, the CPT argued.
The sector, which employs 81,000 people, is also recovering from the pandemic and companies are currently being forced to spend millions of pounds on moving to low-emission or electric vehicles, the CPT added.
“Many of these operators are long-established local businesses which have been painstakingly built up over several generations. They are run by entrepreneurial families with much of their net worth tied up in garages,” Alison Edwards, director of policy and external relations at the CPT, said.
“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,” Edwards said.
She added: “It is disappointing that this change has been announced with so little warning or consultation, prompting members to scramble to reconsider investment plans. We will be urging the Treasury to reconsider.”
The Treasury has been approached for comment.