A longstanding Cornish holiday park operator has voiced deep concerns over impending alterations to Business Property Relief and Inheritance Tax regulations, saying they could saddle his business with nearly £1 million in additional tax costs. The owner of Ayr Holiday Park, Andrew Baragwanath, said that the unexpected fiscal burden threatens job creation, investment, and the future of his family business.
Since the reform was announced, Andrew’s focus has shifted from growth to survival. He’s put plans to replace departing staff and update caravan stock on hold, expressing frustration over having to spend on legal and accountancy advice: “We have about 30 employees here at the moment… I now would look very carefully at replacing any employee that left… Normally I buy new caravans every year, that may not be possible now.”
The Origin of the Tax Changes
The Treasury plans to overhaul Business Property Relief (BPR) and Inheritance Tax (IHT), reforms set to take effect in April 2026 . These reforms narrow the reliefs available to holiday-park owners like Andrew, who have relied on them for decades since his family founded Ayr Holiday Park in 1950
Impact on Ayr Holiday Park
Andrew estimates the changes could impose around a £1 million liability on his park: “...Potentially it could put a £1 million tax bill on the business.”
He’s reconsidering staff replacements, annual caravan purchasing, and even exploring insurance strategies to protect assets. These responses stem from fears the business is being unfairly targeted.
Family Business under Threat
The Baragwanath family has run Ayr Holiday Park since 1950, with Andrew hoping to pass it on to his daughter. Yet, the looming tax could force them to sell, potentially to corporate groups, sacrificing the park’s personal touch: “It’s almost as though we’re the enemy... But they also have to take into account there is an unintended consequence.”
Wider Regional Effects
New research from Family Business UK and CBI Economics estimates that family-owned firms in the South West may shed nearly 19,000 jobs and reduce investment by 16%, triggering a £1.3 billion decline in economic output. Such figures underscore the larger implications for rural economies.
Industry Voices Sound Alarm
Deborah Walker, Director General of the British Holidays and Home Parks Association, urges the government to reassess, warning new rules could inadvertently cost the Treasury £130 million and force closures of cherished family-run operations: “There is actually going to cost the Treasury £130 million and... force much‑loved family‑run businesses to have to sell up or close down…”
Government Defends the Policy
A HM Treasury spokesperson states that about 75% of estates will still escape IHT entirely, while the remaining 25% will pay half the usual rate, with payments spread interest-free over ten years. This, they argue, is a balanced solution supporting public services and investment.
Conclusion
While the intentions behind the Treasury’s changes may be to modernize tax reliefs and fund public services, it's clear that for small holiday-park owners like Andrew, the burden is real and heavy. With projected tax payments of £1 million, Ayr Holiday Park is rethinking hiring, refurbishment, and its very future. Meanwhile, South West economic bodies warn of thousands of lost jobs and stalled investments worth over a billion pounds.
The sector’s concerns have drawn the attention of industry voices like Deborah Walker, who highlight paradoxes in the policy: forecasted losses for both parks and public coffers. Ironically, reversing some relief could cost the Treasury £130 million, dismantle family businesses, and weaken rural economies, exactly what the reforms aim to avoid.
Government responses affirm broad protections, capping IHT and creating payment flexibility. However, for those already operating close to the margins, these protections may come too late. The heart of the issue is simpler: policies designed in London can disrupt rural livelihoods built over generations. Now, with local leaders asking for a reassessment, the fate of holiday parks and the communities they support hangs in the balance.
Frequently Asked Questions
What tax changes are affecting holiday park owners?
From April 2026, reforms to Business Property Relief and Inheritance Tax will reduce reliefs and may impose a steep tax on family businesses.
How much could Ayr Holiday Park owner owe?
Owner Andrew Baragwanath estimates the new tax could total around £1 million, forcing delays in expansion and staffing.
Why are family-run parks particularly vulnerable?
They often rely on BPR/IHT reliefs for intergenerational transfer. Removing these increases liabilities or forces sales to larger, corporate groups.
What broader economic impact is expected?
A report suggests nearly 19,000 job losses and 16% cuts in investment across the South West, reducing output by about £1.3 billion.
What is the government’s defense of these reforms?
Treasury argues that 75% of estates remain exempt, while the rest pay half the usual IHT, spread interest-free over 10 years, a policy framed as fair.
