No Match Found
This latest report from the Family Business Research Foundation presents new evidence on the contribution that the family-business sector makes to the UK’s public finances– estimating the tax contributed to be £225bn in 2021. Employment taxes and VAT represent the largest proportion (80%) of all taxes contributed by the firms in our study. The previous assumptions used in the charity’s family-business Sector Report were becoming increasingly outdated and this study was commissioned, with the assistance of PwC, to bring the estimated tax contribution of the UK’s family firms up to date. The results certainly highlight the importance of family businesses to our economy and the Exchequer.
It is interesting to note that the overall proportion of tax contributed by family businesses is similar to other businesses although a comparatively higher value of the tax contribution relates to employment taxes. The importance many family firms placed on contributing to their local community by maintaining jobs, where they could, during the pandemic may be a contributing factor.
There is also some evidence here that providing employment and training to apprentices is an important way that family firms are contributing to the economy, with many of the family firms in this study making use of the UK's apprenticeship levy.
There is much to build on here. The Research Foundation is embarking on new research looking at the ESG performance and impact of family firms, of which taxation forms a part. Looking forwards, the learning from this study will assist us in producing more robust evidence on the overall economic impact of the UK’s family businesses.
To learn more about the Family Business Research Foundation, visit the Family Business Research Foundation website.
It hasn’t been the easiest five-year period for any business operating on a global stage. In a period of “perma-crisis” customers, shareholders, government and the public turn to businesses in whom they have confidence.
A decade ago family businesses scored 20 points higher than non-family businesses on the Edelman Trust Barometer. And PwC's 11th Global Family Business Survey underlines the importance of this today, with 95 per cent of family business respondents saying that they need customers to have confidence in them.
We at PwC believe that in order to build confidence, family businesses need to prioritise the issues that matter most to the majority of today’s customers putting real emphasis on environmental, social and governance issues, including DEI (Diversity, Equity, Inclusion). In many cases family businesses are “walking the walk” but, given a natural inclination to maintain a low profile, fiercely protect their privacy and not flaunt their credentials, they are not perceived as “talking the talk”.
We believe that this report, as the first of its kind in relation to the family business sector, can go a long way to righting this balance for family business by providing robust data to raise the public profile of what family businesses contribute in taxes.
It is hard to ignore the stark statistics the report reveals including the estimated £225bn contribution by the family business sector as a whole to the UK public finances in 2021 (more than a quarter of UK Government receipts from all taxes) and that 41 per cent of the total value generated by family firms is distributed to
their employees in wages. We hope that family firms can use this as a base to demonstrate to stakeholders, including government and the wider public, not only their "Environmental, Social and Governance (ESG)" credentials but the importance of their enduring legacy for future generations.
We at PwC act for family businesses in the UK, helping them from inception through growth to generational change and beyond into the legacy which often becomes a diversified family office for generations to come.
In an age where more than half the world’s population are millennials and gen Z, there is a need for family businesses to change the narrative and more vocally demonstrate these credentials in order to retain the very high levels of consumer confidence that they enjoy within the global economy.