More than 5,000 family firms are set to incur inheritance tax by 2030 by passing down their £1million-plus businesses.
CBI Economics said this would result in average investment reductions of 16.5 per cent — and staff cutbacks of 10.2 per cent.
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Its research projects some 125,678 jobs will be at risk by 2030 and slashing the value of the economy’s goods and services by £9.4billion.
Neil Davy, at Family Business UK, said: “Changes to BPR announced in the Budget will fundamentally remove incentives among owners of family firms to invest in their businesses and it may threaten their viability.”
William Lees-Jones, of independent brewer JW Lees, said: “For us to have to divert funds into dividends to pay inheritance tax would inevitably reduce future investment in the firm.”
A Treasury spokesperson said “We had to make difficult choices to fix the foundations of the country and restore economic stability for businesses to thrive.”
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