NFU leader discusses inheritance tax with Defra and Treasury

In last week's budget, chancellor Rachel Reeves announced that agricultural property relief (APR) would be cut for farm assets over £1m, from April 2024.

This provoked a furious reaction from the farming industry, which says family farms will no longer be able to hand down land to future generations without incurring crippling tax bills - potentially forcing many to quit the industry.

The budget also sparked the launch of an EDP campaign, calling for all East Anglian MPs, of all parties, to oppose the plan.

Defra secretary Steve Reed (Image: Defra) Tom Bradshaw, president of the National Farmers' Union (NFU), claims that 75pc of the UK's food production now falls "within the scope" of the tax changes.

He met with Defra secretary Steve Reed and James Murray, exchequer secretary to the Treasury, to discuss the implications - and he also questioned the figures on which the decision was based.

He said the Treasury had "got its figures wrong" by claiming that only 27pc of farms would be affected because 73pc of past APR claims were below £1m.

The NFU says these figures do not consider farms that have also claimed Business Property Relief for diversification ventures, and they also include a "substantial number" of smallholdings valued under £500,000.

By comparison, Defra’s figures show that 66pc of farms are worth more than the new £1m tax threshold.

The NFU says "very few viable farms are worth under £1m", which it adds "could buy 50 acres and a house today".

Speaking after the meeting, Mr Bradshaw said: "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.

“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.

“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."

He added: "There is a massive discrepancy in these figures, and at the very least we would hope that would cause the government to pause and get to the bottom of the structure of the industry, rather than crack ahead based on figures which are not particularly reliable."

'Militant action'

Mr Bradshaw said no-one at the meeting "would have left that room not knowing how angry the industry is".

"They just need to put their hands up and say they got it wrong," he added.

"The outrage from farmers and rural communities is like nothing I have ever experienced before. We have got lots of people talking about militant action.

"That is not supported or condoned by the NFU, but it demonstrates the strength of feeling bubbling up across the UK, if these changes keep going the way they are."

A government spokesman said ministers "understand concerns about changes to Agricultural Property Relief".

“Ministers made clear that the vast majority of those claiming relief will not be affected by these changes," they said. "They will be able to pass the family farm down to their children just as previous generations have always done.

“This is a fair and balanced approach that protects the family farm while also fixing the public services that we all rely on. We remain committed to working with the NFU and listening to farmers."