New data from the Horticultural Trades Association (HTA) further sets out the risks posed to the environmental horticulture sector by the Autumn Budget. As a sector of mostly small and medium-sized (SME) businesses, many of which are family-owned, the challenge is acute due to the triple whammy of measures announced in the Budget concerning changes to inheritance tax (IHT), national insurance contributions (NIC), and the National Living Wage (NLW).
Two recent HTA member surveys, the Q3 2024 Business Barometer and the November 2024 Member Consultation Survey, provide a snapshot of the industry's current state.
The surveys say that there has been a 21% reduction in net profit is forecast for 2025 due to rising NIC and NLW costs, equating to a £134 million collective hit on HTA members. Two-thirds of businesses plan to raise prices, while many will postpone or reduce capital investments and consider recruitment freezes. Sales and net profits were already 7% behind forecast before the Budget, with retailers and landscapers facing additional pressures from adverse weather and rising costs.
From April 2026, inheritance tax (IHT) relief for business and agricultural assets will be capped at £1 million for an individual. For any amount exceeding this threshold, a reduced IHT rate of 20% will apply instead of the standard 40% rate. It is hoped that the tax can be paid in interest-free installments over 10 years to alleviate the immediate financial strain. However, family-owned garden centers and commercial growers are uniquely vulnerable to these changes, as much of their asset value lies in land and property. This situation places them at a disproportionately severe disadvantage compared to other sectors. HTA members have voiced concerns about the challenges of transferring businesses to the next generation, with some contemplating the sale of assets or even the entire business—actions that could jeopardize jobs and livelihoods.
To assist members in navigating these challenges, the HTA hosted an Autumn Budget Webinar on December 2, 2024. Industry experts from Johnston Carmichael and Turner Morum provided guidance on adapting to the fiscal changes as well as signposting available reliefs.
The HTA continues to advocate on behalf of its members, engaging with policymakers to highlight sector challenges. Recent actions include a joint letter with the British Retail Consortium and ongoing discussions with government officials.
For more information:
Horticultural Trades Association
www.hta.org.uk