Farming Unions Vow to "Keep Up the Pressure" on UK Government Over "Draconian" Family Farm Tax

Strategic Insights -

Farming unions in the UK are determined to fight against the introduction of a 20% inheritance tax on agricultural assets worth over £1 million, which the government has announced will be levied from next year. The proposals, outlined in last year's Autumn budget, have been met with fierce resistance from farming unions, who argue that the changes will devastate the industry and force many small-scale farmers out of business. Despite the UK government's insistence that only around 500 farms will be impacted, rural groups claim the figure is much higher, and a report published earlier this year showed that almost half of farmers have paused or cancelled investment in their businesses due to the expected tax changes.

Key Takeaways:

  • The UK government plans to introduce a 20% inheritance tax on agricultural assets worth over £1 million from next year, affecting around 500 farms, according to the government.
  • Farming unions dispute the figure, claiming that the impact will be much broader and devastating for the industry.
  • A report published earlier this year showed that almost half (49%) of farmers have paused or cancelled investment in their businesses due to the expected tax changes.
  • Farming unions, including the National Farmer's Union Scotland, have vowed to "keep up the pressure" on the government to revise the plans.
  • The government has been accused of poor communication in policy making, with the Commons Environment, Food and Rural Affairs Committee warning that the reforms could impact vulnerable farmers.
  • The government has said that it will consider alternative proposals, but the tax changes will make the system "fairer" and stabilise the economy.

Statistics:

  • 49% of farmers have paused or cancelled investment in their businesses due to the expected tax changes (Source: Report published earlier this year).
  • Around 500 farms will be impacted by the inheritance tax changes, according to the government (Source: https://www.scotsman.com/hays-way/its-had-a-chilling-effect-almost-half-of-farmers-stop-investing-with-impact-of-tax-changes-5075747).
  • £1 million is the threshold for inheritance tax on agricultural assets (Source: Last year's Autumn budget).

Sources:

  • Report published earlier this year (no date specified)
  • Scotsman.com article, "It's had a chilling effect: Almost half of farmers stop investing with impact of tax changes" (July 2023)
  • Scotsman.com article, "Farming market distorted: MPs warn ministers to delay reforms" (August 2023)