Gordon and Buchan Tory MP Harriet Cross handed a letter to the chancellor earlier today, on behalf of party colleagues and industry organisations, amid the ongoing furore over the so-called “family farm tax”.
Farms throughout the UK are facing hefty inheritance tax bills as a result of controversial measures unveiled in last week’s Autumn Budget.
The letter is signed by all five Scottish Conservative MPs, including West Aberdeenshire and Kincardine representative Andrew Bowie, the new shadow Scottish secretary.
They are joined on the list of signatories by more than 80 MPs from elsewhere in the UK, as well as 14 members of the House of Lords.
Industry groups penning their names include British Dairying, the British Independent Retailers Association, British Sandwich and Food to Go Association, Country Life, Dairy Farmer, Farm Retail Association, FarmingUK, National Federation of Young Farmers’ Clubs, National Pig Association, National Sheep Association and Royal Association of British Dairy Farmers.
Letter to chancellor highlights ‘deep concern’ and calls for ‘urgent reconsideration’ of Budget measures
Their letter to Rachel Reeves says: “We are writing to you as parliamentarians, representatives of farming and rural community organisations and rural advocates to express our deep concern and urge an urgent reconsideration of the changes to agricultural property relief (APR) and business property relief (BPR).
“Changes to these longstanding reliefs present serious and potentially devastating challenges to family farms across the United Kingdom and our nation’s food security.
Tax reliefs are ‘farming lifelines’, the letter says
“APR and BPR have long been lifelines, allowing farming families to sustain their land, our food security and the nation’s rural heritage through generations.”
The letter adds: “Farms do not have liquid wealth; farmers rely on land as their primary business asset to produce food and turn often a small profit, but have a very constrained cash flow.
“For many, passing on the family farm is not merely a matter of inheritance but ensures food security, local employment and a way of life that has shaped our rural communities and economies for generations.”
What’s changing?
Currently, relief of up to 100% of inheritance tax rate is available for qualifying agricultural and business property assets.
According to the Treasury, the changes will affect just over one-quarter of UK farms.
Today’s letter calling for a U-turn says: “With an average UK farm size of approximately
217 acres and using the average GB agricultural land value of £8,200/acre, which by definition will undervalue many farms, even modest family farms easily exceed the £1 million threshold.
Read more: North and north-east MPs join attack on UK minister over ‘family farm tax’
“Even more acute is the impact on arable farms, where the average value last year ranged from £8,700/acre to £10,100/acre, depending on the land grade.
“The change to APR/BPR in the Budget is not, therefore, a measure targeting
wealthy tax avoiders but will impact genuine family farming operations across the country.”
The letter goes on: “The certainty is that most commercially viable family farming operations will face crippling new tax bills. The reality of these changes is deeply concerning.
“With ever-changing margins and farm income already stretched thin, many families will have no choice but to sell portions of their working farm to pay the tax bill.
“This will break up long-standing family farms and push more agricultural land into the hands of large corporations, threatening both local food production and the character of our rural communities.”
A petition has been set up by the Conservatives to “stop the family farm tax”.
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