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Ministers have been warned that they face a “militant” backlash from farmers over the so-called tractor tax of imposing inheritance death duties on family farms over £1 million.
The warning came from National Farmers’ Union (NFU) president Tom Bradshaw as he met with environment secretary Steve Reed over the shock measure in the Budget, while a protest has been planned for 19 November when angry farmers are set to descend on London.
The row over inheritance tax changes came on top of a lack of extra funds for farming in Rachel Reeves’ announcements last week coupled with extra costs through increases in national insurance for employers and a 6.7 per cent rise in the minimum wage.
Mr Bradsaw said that the ‘tractor tax’ raid through changing inheritance rules on farmland which had previously been exempt was “completely unfair.”
He said he had never seen “the weight of support, the strength of feeling and anger” over the plans to impose inheritance tax on farms worth more than £1 million, and added that many farmers wanted to be “militant” over the issue.
Under plans announced in the Budget, inheritance tax will be charged at 20 per cent on farms worth more than £1 million, although the chancellor has said that in some cases the threshold could in practice be about £3 million.
The move has caused a considerable backlash from farming and countryside communities, and led to a dispute over just how many farms and farm businesses would be affected.
Speaking after a meeting with Mr Reed and exchequer secretary to the Treasury James Murray, Mr Bradshaw challenged the figures from the Treasury, that only a minority of farms would be affected.
He said: “Obviously, we fully dispute the figures the Treasury has been using and we’ve played back Defra’s own figures.
“So, the Treasury is saying only 27 per cent of farms will be within scope of these changes, Defra’s own figures suggest that two-thirds of farms will be in scope.
“How they can have that wide a discrepancy within government is quite unbelievable.”
He said there had been no resolution on the issue, adding: “We’ve made very passionately our perception clear, that this tax change is completely unfair.
“It had been ruled out by the secretary of state in the run-up to the election and now there are many family farms right across the United Kingdom that are worried for their future.”
He said he had been receiving calls from people in their middle age who have been running successful businesses, but whose parents were still in the family house and partners in the business, and might not live for seven years – the minimum time after a transfer of assets for inheritance tax not to apply.
Mr Bradshaw said: “There’s no way through it for them.”
And he said: “We will continue to try and work with the Government to get to a resolution but something has to change.
“I have never seen the weight of support, the strength of feeling and anger that there is in this industry today.
“Many of them want to be militant.
“Now we are not encouraging that in any way shape or form, but Government need to understand that there is a real strength of feeling behind what this change means for the future of family farming in this country.”
Ms Reeves told the BBC’s Sunday With Laura Kuenssberg: “Only a very small number of agricultural properties will be affected, but last year the benefits of agricultural property relief, 40 per cent of the benefit, was felt by 7 per cent of the wealthiest land owners.
“I don’t think it is affordable to carry on with a relief like that when our public finances are under so much pressure.”
But the NFU said that many family farms have a high notional asset value, but very low income and liquidity, which means that the vast majority of owners would be unable to meet the inheritance tax charges, without selling assets.
