Thousands of farmers are descending on the streets of Westminster today in protest at the government’s shake-up of inheritance tax. Here The Mirror looks at the tax changes
Thousands of farmers are descending on the streets of Westminster today in protest at the government’s shake-up of inheritance tax.
Former Top Gear presenter Jeremy Clarkson is set to be among them – defying doctors’ orders after a recent heart operation to join the demonstration.
The National Farmers’ Union (NFU) is holding a mass lobby of MPs with 1,800 of its members to urge backbenchers to demand the Government U-turns.
Thousands more are expected to join a separate rally in Whitehall as they protest. Here The Mirror looks at the tax changes and why the farmers are protesting.
What is changing and how much inheritance tax will farmers now pay?
Chancellor Rachel Reeves announced at last month’s Budget farms worth more than £1million will be now subject to inheritance tax.
Previously farming businesses qualified for 100% relief – paying zero inheritance tax. Since 1984 landowners have been able to pass this on without being hit.
But now the tax is being imposed on farms worth more than £1 million, with an effective tax rate of 20% on assets above the threshold. This is less than the standard 40% rate.
It is claimed that the actual threshold before paying inheritance tax could be as much as £3 million, once exemptions for each partner in a couple and for the farm property are taken into account.
The Government says around 500 claims a year are expected to be affected – but this is hotly disputed by the farmers’ union, who say it will be considerably more.
What has farmers’ union said?
The National Farmers’ Union (NUF) President Tom Bradshaw has accused the government of a “betrayal” of farmers in an angry response.
He told Sky News on Tuesday: “There’s always been an understanding, a contract, between farming and society, farming and the government, ever since the Second World War, and this Labour Government has just destroyed that contract with the changes they proposed to the inheritance tax.”
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He said NFU members are “asset-rich but cash-poor”. “We’d love to pay more tax,” Mr Bradshaw added. “If we get proper margins from food production, and we end up swelling the Treasury coffers, bring it on.
“But at the moment the supply chain doesn’t give us those returns that enable us to save the money to pay the inheritance tax that this Government now wants to take.”
What has Keir Starmer said?
Speaking to reporters earlier this week on the way to the G20 summit, Keir Starmer insisted the “vast majority” of farms would be unaffected by the changes as he doubled down.
He said :“I think it is very important that we support farmers. That’s why we’ve put £5billion in the Budget for the next two years into farming.
“That is not to be overlooked. That is the single biggest sum of money in a Budget over a two-year period that has ever been put down in relation to farming.” He also pointed to £250million to help with flooding and disease control for farmers.
But he admitted: “Obviously, there’s an issue around inheritance tax and I do understand the concern.”
Will the Government U-turn on the changes?
A U-turn appears extremely unlikely – despite the farmers’ protest today.
In a joint statement with the Environment Secretary Steve Reed last night, the Chancellor said farmers were the backbone of Britain and acknowledged the “strength of feeling” from farming and rural communities in recent weeks.
They insisted they were “steadfast” in their support of British farming, saying: “It’s why we are investing £5 billion into farming over the next two years – the largest amount ever directed towards sustainable food production, rural economic growth and nature’s recovery in our country’s history.
But they said: “With public services crumbling and a £22 billion fiscal hole that this Government inherited, we have taken difficult decisions.
“The reforms to agricultural property relief ensure that wealthier estates and the most valuable farms pay their fair share to invest in our schools and health services that farmers and families in rural communities rely on.”
