9 hours ago
1
Farmers' leaders have urged the prime minister to put changes to agricultural inheritance tax on hold while ministers consult with them.
National Farmers' Union (NFU) president Tom Bradshaw told MPs farmers were ready to work with the government, adding later that there were "many ways" to make the policy "less bad".
Protesters drove tractors through Westminster on Wednesday, staging another protest against October's Budget, while in the Commons Liberal Democrat leader Sir Ed Davey called on the PM to "change course and recognise the vital role that British family farms play".
But Sir Keir Starmer insisted the "vast majority" of farmers would not be affected by the tax changes.
As a result of the Budget, from April 2026, inherited agricultural assets worth more than £1m, which were previously exempt, will be liable to inheritance tax (IHT) at 20% - half the normal rate.
Other allowances could allow a couple to pass on a farm worth up to £3m.
But many farmers argue that while they might be asset rich - in terms of their land and livestock - they are cash poor and the changes will force them to sell up to pay the tax.
Farmers' leaders appeared before MPs on the Commons environment, food and rural affairs committee on Wednesday.
Mr Bradshaw called for tax changes to focus on personal wealth, not business wealth, which he said would lead to a "very different proposal than the one that's on the table".
"Our position is: let's work with you to get to an outcome that works for all rather than the blunt instrument that we have today," he told MPs.
Robert Martin, national chairman at the Tenant Farmers Association, said the committee the plan to close the tax loophole - involving wealthy people avoiding inheritance tax by buying up farmland - would not work because capital gains tax rollover relief for agricultural businesses had been left in place.
Tax expert Dr Arun Advani, director of think tank CenTax, told the committee the Budget measures would probably only "slightly" slow land price inflation, because the 20% IHT rate was "still much more attractive than other sorts of assets".
"What you will still have in this world is people who want to buy up agricultural land competing with genuine farmers who are trying to expand their farm, who really are actually wanting to work on the land," he said.
In a letter to Sir Keir following the committee hearing, Victoria Vyvyan, president of the Country Land and Business Association, said: "Let's stop and think. Let's not just crash forward, hoping against hope that this will turn out alright or it will turn out differently."
During Prime Minister's Questions, Sir Ed called for a rethink of the policy, saying family farms had been badly let down by the previous Conservative government and now felt the recent Budget would be "the final blow".
Sir Keir replied that the government had put "a record" £5bn into farming over the next two years.
On IHT, he added, "in a typical family case the threshold is £3m and therefore the vast majority of farmers will be unaffected despite the fearmongering of the party opposite [the Conservatives]".
The prime minister's spokesman later said there would not be a rethink on inheritance tax, adding "we understand the strength of feeling about the changes, but we are clear this will only affect a small number of estates".
