British farmers warn: New tax rules put national food production at risk

British farmers dispute governments claim that inheritance tax changes will affect only wealthy estates. National Farmers Union says these reforms might impact three-quarters of UK food production

November 4 2024, 07:14 PM  •  474 views

British farmers warn: New tax rules put national food production at risk

British farming faces big changes as new inheritance-tax rules shake up the industry. Tom Bradshaw from National Farmers Union points out a math problem: while the Treasury says only 25% of farms will pay more tax these farms make most of UKʼs food

The Treasury set a one-million pound cut-off for tax-free inheritance starting next spring; however NFUʼs data shows different numbers According to Bradshaw these larger farms (which government wants to tax) produce about 75% of British food

A farm thats worth more than £1m will have to pay a 20% tax starting in spring-2025 (you can pay it over 10 years if needed). The problem isnt just numbers – its about how farms work: “A working farm needs to be big to stay in business but that doesnt mean its making lots of money“ Bradshaw explains

The changes bring up some real-world worries:

  • Less money for farm improvements
  • Possible land sales to pay taxes
  • Harder to pass farms to next generation
  • Food security risks
  • Mental health impact on farmers

Steve Reed Environment Secretary met with NFU leaders on 11/04 to talk about these issues. The government keeps saying its protecting small farms but NFU disagrees: “Theyʼre actually helping people with small hobby-farms while hurting real food producers“

The government defends its position: “We give £5bn to farming over two years; most farms wont be affected by new rules. Its a fair way to support both farming and public services“. HMRC numbers show about 500 farms worth over £1m would have paid this tax in 21-22 if rules were different back then