A group of prominent MPs has called on the government to support at-risk farmers by allowing them time to seek guidance on creating a more effective tax policy concerning controversial changes to inheritance tax for agricultural assets.
The Environment, Food and Rural Affairs (EFRA) Committee is asking the government to delay any major changes to agricultural and business property relief until October 2026, with a proposed implementation date set for April 2027.
According to the report, this delay would facilitate a more thoughtful development of tax policies and provide the government with a chance to articulate a positive, long-term vision for agriculture. The MPs voiced concerns that the intended changes could harm the most vulnerable farmers and emphasized the need for a pause to secure appropriate expert advice while allowing for consideration of alternative options.
Prime Minister Rachel Reeves stirred controversy in October when she revealed plans to alter inheritance tax rules for farms and agricultural assets, aiming to generate funds for public services and close tax loopholes that benefit wealthy landowners.
Reeves’ proposal to end a longstanding exemption for farms, which requires heirs to pay 20% on the value of agricultural and business property exceeding £1 million, has triggered significant protests recently, highlighted by disruptions at her speeches by tractor horns.
Members of the Cross-Party EFRA Committee have raised alarms about changes introduced in the latest budget, expressing concerns about the lack of adequate consultation, impact assessments, and concerns over the accuracy of property valuations, leading to unintended consequences.
While the committee supports adjustments to inheritance tax, they are urging the Minister to engage in discussions that protect small family farms.
Alistair Carmichael, the chair of the EFRA committee and a Liberal Democrat, criticized the government’s communication with farmers, particularly relating to major subsidy schemes post-Brexit and the abrupt termination of sustainable farming incentives.
Carmichael noted, “The actions of the government over recent months have clearly affected farmers’ confidence and morale.” He pointed out that communication from the Department for Environment, Food and Rural Affairs has been inadequate, presenting confusing and sometimes contradictory messages. He emphasized the absence of proper consultations, with policies affecting farmers announced without considering their implications.
He urged the government to adopt the committee’s recommendations, suggesting that this is a chance to regain trust within the agricultural community.
Carmichael added, “Farmers should play a vital role in the government’s plans for ensuring food security and for environmental restoration and protection.”
