The Builders Merchants Federation (BMF) has signed an open letter sent to the Chancellor calling for a consultation on changes to Inheritance Tax.

CEO of the BMF John Newcomb is one of 32 signatories, representing trade and industry bodies, that collectively represent 160,000 UK family firms and farms.

Leaders from the British Home Enhancement Trade Association, British Independent Retailers Association and Home Builders Federation are also among the signatories.

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In an open letter, led by the Family Business UK, the trade associations warn changes to Business Property Relief (BPR) and Agricultural Property Relief (APR) will starve their members and economy of investment, lead to forced, premature business sales and result in job losses.

Independent economic modelling commissioned by Family Business UK and conducted by CBI Economics suggests the changes to BPR alone could result in a £1.25 Billion net fiscal loss to the Exchequer, lead to more than 125,000 job losses and reduce economic activity (GVA) by £9.4 Billion over the course of the Parliament.

The BMF, which represents the UK’s building materials sectors, is concerned changes to Inheritance Tax announced in the Autumn Budget could significantly impact private and family-owned businesses in its membership.

BMF CEO John Newcomb said: “It’s important to acknowledge that the unintended consequences of the Budget don’t wipe out what it was aiming to do, which is stimulate economic growth.

“Construction is absolutely critical to the lifeblood of the UK economy, but we are hearing across the industry that the changes in inheritance taxation could limit the future of the sector, with many private and family businesses across our membership reporting back that the impact of Business Property Relief will damage enterprise.

“The end result could be a scaling back of the operations at SME merchants, suppliers and even builders in light of the changes, and that will have a significant impact on the whole economy.”

“Most BMF members are now reviewing their sales and trading forecasts for the next two years and looking at investment decisions, stock levels and staffing numbers.

“Early indications are that the proposed changes to Business Property Relief pose significant concerns to family-owned businesses.

“We suspect owners may choose to defer or cut back on investing in or expanding their operations in the near term, in areas such as upgrading production lines, replacing plant and machinery, adding to product ranges, opening new branches, or taking on more staff, especially apprentices.

“This is a retrograde step for each company, and our supply chain, as it diverts money away from operational needs.”