NFU meets with Defra and Treasury to discuss Inheritance Tax

04 November 2024

Headshot of NFU President Tom Bradshaw

The NFU has today met with the Defra Secretary of State and Treasury officials to stress the significant impact changes to Inheritance Tax (IHT), as outlined in last week’s Budget, would have on British food and farming.

In the meeting, NFU President Tom Bradshaw outlined exactly what this would mean for family farms across the country, the knock-on impact on homegrown food production, and the stress and anxiety these planned changes are causing.

Speaking about the meeting, Mr Bradshaw said: “I’ve spoken to a huge number of our members in the past few days and heard some really upsetting accounts of what this tax would do to family farms.

“I’ve heard about distressed elderly parents who are having to apologise to their children in tears for something that isn’t their fault, telling them they’re sorry because they feel they’re now a burden on the family. I’ve heard from families who can’t see any way they can plan for a future which doesn’t result in losing their business. Men and women who’ve spent years building up farm businesses now wondering what’s the point in carrying on when it’s going to be ripped apart.

“These are the working people of the countryside, and I made it clear to Defra and the Treasury today that there has been a clear miscalculation of the impact this will have on them. The Treasury has got its figures wrong. This policy won’t protect family farms, it will do the opposite.

“Treasury officials have assumed that all previous Agricultural Property Relief (APR) claims are working farms, which is not the case. Nor did these claims include those eligible for Business Property Relief (BPR). Far from protecting smaller family farms, which is what ministers say they’re doing, they’re actually protecting private houses in the country with a few acres let out for grazing whilst disproportionately hammering actual, food-producing farms which are, on paper, much more valuable. Even Defra’s own figures show this, which is why they’re so different to the Treasury data this policy is based on.

“With Defra data showing two thirds of farms could be affected, it was good to hear that the Treasury would look at the discrepancy in figures. 

“I also asked if there were plans for an impact assessment of this policy on homegrown food production. Because if farms are being broken up and sold, British food will be hit. There is a very real threat to our long-term food security because there is no incentive to invest for the future.

“With businesses already running on unsustainably tight margins – mass flooding meant that many haven’t turned a profit this year – compounded with further costs from National Insurance and National Living Wage increases, farming families have nothing left to give.

“At last year’s NFU Conference, we heard from Sir Keir Starmer that ‘Losing a farm is not like losing any other business, it can’t come back’. He was absolutely right. It can’t. And neither can its ability to produce food for the nation.

“That’s why the only sensible course of action is for the Treasury to reverse this decision.

“The pressure is building. Defra and the Treasury are aware that on 19 November, NFU members will be making their way to Westminster to take part in our mass lobby of MPs. We will be looking them in the eye and ask them if they support this family farm tax, or if they will do the right thing for their farming constituents and support our call for it to be reversed.”

More information:

The Treasury has said 73% of APR claims are below £1 million and so would be unaffected by this policy. However, Defra data (figure 2.7) show that only 34% of farms are under £1 million net worth.

  • The Treasury’s figures are based on past APR claims and do not consider farms that have also claimed BPR for diversified aspects of their businesses.
  • They also include a substantial number of smallholdings, with 27% of those Treasury figures being for assets under £250,000, and another 23% under £500,000.
  • Very few viable farms are worth under £1 million. That could buy 50 acres and a house today. No viable food-producing business is 50 acres. The average farm in the UK is more than 250 acres.