Treasury to look again at inheritance tax figures, NFU says

Defra and the Treasury will “work on the figures” on the planned farmland inheritance tax (IHT) changes, following a crisis meeting with the NFU and threats of militant action by farmers.

NFU president Tom Bradshaw met Defra secretary Steve Reed and treasury minister James Murray in an emergency meeting at Westminster on Monday (4 November).

Mr Bradshaw described Mr Murray’s unexpected attendance as a “really important sign that the Treasury are maybe beginning to listen”.

See also: Farmers threaten strike action over inheritance tax hike

At the crux of those talks was how many farmers would fall within the scope of the changes.

The Treasury has said 73% of Agricultural Property Relief (APR) claims are below £1m and so would be unaffected by this policy.

However, the NFU pointed out that Defra’s figures show that only 34% of farms are under £1m net worth, with the average UK farm area being more than 250 acres (101.71ha).

The NFU added that very few viable farms were worth under £1m, as that would “buy 50 acres and a house today”.

“There is a massive, massive discrepancy between those numbers,” Mr Bradshaw pointed out.

Referencing that inconsistency, he told Farmers Weekly: “They are going to go away and work on the figures to try to come up with the truth.

“What it tells me is that Defra weren’t consulted on this policy change because otherwise it would have been identified very early on that there were very different figures that this decision would have been based on.”

Mr Bradshaw warned of the mental health fallout from the tax raid.

“It is unimaginable the pressure they have put on the industry at a time when the secretary of state has stood on a platform and said he recognises the mental health challenges that this industry is facing,” he said.

“To make this change now and to rip the rug from underneath the feet of the farming industry, having ruled it out in the first place, I just do not understand how they think it is in any way acceptable.”

Threat of militant action

The outrage from farmers and rural communities is on a scale Mr Bradshaw said he had never seen and, although not condoned by the NFU, many were talking of militant action.

“That’s the only way they think their voices are going to be heard and I think that just demonstrates the strength of feeling that there is bubbling up around all four corners of the United Kingdom if this change carries on in the way it is proposed today.”

Around 75% of UK food production is thought to fall within the scope of the changes.

Mr Bradshaw believes it removes all incentive for investment because increasing the value of assets on some farms would put them outside the IHT threshold.