Inheritance tax uproar shakes rural Britain

The recent budget has ignited rural anger and exposed a deep gap in the government’s understanding, says Andrew Livingston

Jeremy Clarkson called it the ‘end for farmers’, NFU President Tom Bradshaw claimed it was a ‘stab in the back’ – and many in the agricultural community have claimed that chancellor Rachel Reeves is to farming what Margaret Thatcher was to the coal mining industry.
For more than a month now, the agricultural sector has pleaded for the Labour Government to reverse its plans to cut farmers’ protections from paying inheritance tax in April 2026, as set out in the Autumn Budget.
‘At best it’s naivety, and at worst it’s vindictive,’ NFU Dorset deputy chairman Tim Gelfs told The BV. ‘The government took no consultation. They promised the NFU last year they weren’t going to touch it, and that was a promise from DEFRA (Department for the Environment, Food and Rural Affairs).’
As it stands at the moment, Agricultural Property Relief (APR) and Business Property Relief (BPR) are two forms of protection against Inheritance Tax, allowing for agricultural land and businesses to pass to direct descendents after the farm owners pass away. This ends in 2026, when farmers will begin to pay a 20 per cent tax rate for any property valued at more than £1 million (half the usual rate).
Reeves and the Government state that the tax will help to fund essential servicesand will stop tax evasion. Under the current system, wealthy individuals are buying up land to pass to their offspring so that they don’t have large amounts of cash to be taxed at 40 per cent.
The government’s figures suggest that 73 per cent of farms won’t be affected. This figure is being challenged by the NFU and the wider farming community. Tim explains: ‘Their 73 per cent includes those who own a pony paddock or a single fields – it isn’t a true representation of commercial farms. We’ve got figures from DEFRA that show that 66 per cent of farms are going to be affected.’
‘Tom Bradshaw, the Country Land and Business Association (CLA) and the Tenant Farmers Association all met Steve Reed, the DEFRA Secretary of State, to talk about these figures on the Monday after the Budget. Steve Read said that they would go back and have a look at the figures, and there was a possible hint from DEFRA that there might be some movement,’ says Tim Gelfs. ‘But he obviously got his knuckles rapped as he’s back on the same rhetoric as the government, on the figures of 73 per cent. It makes you wonder what the government are up to.’

One per cent returns
You might ask why farmers shouldn’t pay inheritance tax when everyone else has too. The simple answer is that the tax would come as a debt: farmers are asset-rich and cash-poor. Farms struggle to break even and rely heavily on subsidies from the government. These subsidies are given to farmers to compensate them for the low prices the supermarkets pay for their produce.
‘Our big problem is that our return on capital investment is near to nothing,’ says Tim.
‘‘Unlike farmers, other businesses affected by the removal of Business Property Relief aren’t raising concerns, and there is a key reason for that – their return on capital is much higher. Most businesses see a return of 12 to 20 per cent, sometimes even more, while farming typically struggles to achieve just one or two per cent at best. That’s the crux of the issue – when you’re operating on such slim margins, facing a 20 per cent inheritance tax after the first £1 million becomes financially unsustainable.
‘What the government has done is stall the rural economy. Let’s say the DEFRA figures are correct – we’ll lose a lot of farming families. The kids will just say “screw this, we are getting out” and sell up. A lot of kids work on the family farm for not very much money on the promise that “one day, son, all this overdraft is going to be yours”.’

Pedalling for the future
A few weeks ago, Tim Gelfs made the journey to London with thousands of other farmers. Two events took place simultaneously in the capital on 19th of November. More than 1,800 NFU members met with their MPs to share their first-hand tales of how these changes were going to affect them, while 10,000 more farmers held a rally in Westminster.
Tim told The BV that Edward Morello, the Liberal Democrat MP for West Dorset, listened to his constituents’ concerns for almost an hour. ‘We saw and spoke to all the Dorset MPs – even the Labour ones, which was good.’
Over at Parliament Square, there were many more Dorset residents trying to get their voices heard. From Tarrant Rawston near Blandford, three generations of the Tory family attended the rally.
Caroline Tory told The BV of her experience of the friendly, good-natured day: ‘We went up by a 50-seater coach. Lots of neighbours were on there, and many brought their children. My son Mark came with his wife Amy and their two little girls who are four and two.’
Mark is chairman of the Blandford NFU, and he enrolled the two girls in the Pedalling for the Future of Farming. Caroline explained: ‘The big tractor firms had donated ride on toy machinery, and the children pedalled around Parliament Square, signifying the impact of the budget on the future of farming and the countryside. There was a real sense of solidarity among the farmers. People were appearing from all directions, coming through the London streets to the meeting point. There was a real feeling of camaraderie.
‘It’s never just a job for farmers. When you are brought up with it, it’s your way of life. You want to look after the countryside and ensure it’s there for future generations. We’re food producers. We want to feed our country, and to be more sustainable. That’s the most important thing – not to need to rely on imported food.’
Caroline’s description of the mood on the day was echoed by many London residents, who only had good things to say about their rural visitors. The Metropolitan police thanked the protesters for making the day go so smoothly. The visiting farmers also donated more than six tonnes of fresh food to the city’s food banks. They delivered fresh milk, eggs, vegetables, meat and potatoes alongside a vast array of breakfast cereals and canned goods … enough food to create more than 15,000 meals.
But despite everyone’s efforts, the rally and the lobbying have come to no avail. The government has stated that it will not budge on its plans, and Rachel Reeves and the Treasury have refused to meet the NFU to hear their concerns. Tim Gelfs warns that if the government keeps giving farmers the cold shoulder, things could get uglier than a solidarity march: ‘The NFU will keep lobbying, … it would be unwise for the NFU to come out and say, “Right, everyone grab your pitchforks we are off to London”.
‘We need the NFU to keep the pressure up, but there’s talk that we need a more proactive approach too, in order to get the government to the negotiating table. I suspect farmers will begin thinking about blockading the ports, the way the French farmers have done.
‘The APR is the hammer blow. We’ve been struggling on for more than 30 years now, and this is just the final straw. It’s actually affecting a farmer’s land. It’s not just their income. It’s going to affect their whole business, their home.
‘There are a lot of angry farmers out there.’