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:
- 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.
To put these numbers in context, retailers have given some examples of the real impact on HTA member businesses:
“To get back to even ordinary levels of profit would mean cutting staff numbers, or cutting costs by 20%, or increasing margin by 6%, all of which are seismic levels of change.”
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 instalments over 10 years to alleviate the immediate financial strain.
However, family-owned garden centres 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 jeopardise jobs and livelihoods.
