Shadow Chancellor Mel Stride has slammed proposed changes to business tax relief, saying that the policy will force many to “shut down or be forced to sell”.

Stride’s comments echo those of prominent businesspeople and politicians who have been railing against the higher taxes announced in Labour’s budget for the last four months.

“British institutions, which in some cases have been in the same family for decades… may end up shutting down or being forced to sell to foreign buyers as a result of this single reckless policy,” Shadow Chancellor Mel Stride said in the Commons.

Business property relief, which reduces inheritance tax (IHT), is currently set at 100 per cent. However, from April 2026, only the first £1m of qualifying assets will receive 100 per cent relief; above this threshold, qualifying assets will only receive 50 per cent relief from IHT.

Stride pointed to comments by William Less Jones, owner of brewer J W Lees, who has said that the tax would “place [the] business at a considerable disadvantage to [its] competitors, who tend to be listed or owned by private equity, sometimes overseas.” 

“The value… within many businesses lies in their assets, and liquidating those assets to pay those kind of liabilities, given that those assets are often instrumental to the effective working of that firm, is an absurdity,” Stride said.

“Changes will damage businesses’ ability to borrow against assets where there is a sword of Damocles hanging over their head by way of a potential future inheritance tax liability,” he added.

A report from the CBI in January found that changes to the way family businesses are taxed will leave the UK’s coffers £2.6bn worse off than before due to reduced hiring and investment.

These businesses, which employ almost 14m people and account for around 90 per cent of private companies in the UK, are projected to decrease their investment by an average of 17 per cent by 2030, the report found.