Farmers warn MPs of ‘catastrophic betrayal’ if tax breaks are changed

Farmers are being asked to write to their MP stressing how scrapping inheritance tax relief would be a “catastrophic betrayal” of the country’s food producers.

Speculation has been growing that the government is looking to scrap or limit Agricultural Property Relief (APR) and Business Property Relief (BPR).

This is despite Labor’s assurances over the past year that it would not rig the relays.

APR exists to ensure the continuity of farming after the death of the farmer, while BPR serves the same purpose for other types of family businesses.

Farming organizations say the reliefs allow farmers and rural entrepreneurs to continue producing food, maintaining landscapes and supporting the rural economy.

If there is no relief, or even if it is limited, as some have suggested, the industry has warned there would be a high tax bill to pay.

The Country Land and Business Association (CLA), which represents thousands of farmers, said many would be “in the firing line” if they were scrapped or changed in the next budget.

For an average family farm of 215 hectares, without these reliefs, 40% of the holding’s land would need to be sold to fund inheritance tax obligations, according to the body’s own research.

A recent survey of more than 500 farmers found that 86% said it was “likely” that some or all of their land would have to be sold on their death, if reliefs were removed.

And the vast majority (90%) said the move would harm UK food production and food security.

CLA President Victoria Vyvyan has urged farmers to write to their MP to ask them to help protect food security and support the rural economy by maintaining relays.

She said: “If the government pulls the rug out from hardworking farmers by removing these reliefs, it would be a catastrophic betrayal.

“Someone who inherits a family farm from their parents could be forced to sell up to 40% of it to pay their inheritance tax bill.

“If 5% of farms have to sell at their next point of inheritance, 27,000 farms face cessation.

“In many cases it would be the end of the family farm and a hollowing out of rural communities, stifling rural entrepreneurship.”

Government statistics show that 17% of UK farms made no profit and 59% made a profit of less than £50,000 in 2022/23.

The CLA said this would leave little scope for paying inheritance tax from farm income.

The NFU recently warned that many family farms would be “severely affected” if the government changed the gears in the Autumn Budget on 30 October.

The union’s analysis suggests scrapping it would only save the Treasury £120m a year, while the negative impact on farming would be “much greater”.