Call for inheritance tax changes to be paused during farm profitability review
A farming union leader is urging the UK government to call a halt to proposed changes to inheritance tax until a newly launched review into farm profitability is complete.
The plea from NFU Scotland president Andrew Connon comes almost three months after protests were held in John O’Groats and many other parts of the country over the controversial plans.
In a letter to Chancellor Rachel Reeves, Mr Connon welcomed the appointment of Baroness Minette Batters to lead the UK government’s profitability review – but warned that pushing ahead with inheritance tax reforms at the same time would “seriously undermine the credibility and impact of that process”.
“You cannot hold a meaningful review into farm profitability while simultaneously implementing tax policies that reduce it,” Mr Connon said.
“We are calling for a clear and time-limited pause on all changes to Agricultural Property Relief and Business Property Relief until the review has concluded and its recommendations have been properly considered.”
Rallies were organised across Scotland in late January and early February, sending out a message to “Stop the Family Farm Tax”.
More than 50 tractors descended on John O’Groats on February 2, with an estimated 150 members of the agricultural community attending to express their concerns over what they see as a threat to the viability of family farms.
While the inheritance tax changes would affect farms at the point of succession, Mr Connon also highlighted the ongoing impact of other government measures that he says are damaging profitability across the sector.
NFU Scotland had earlier pointed to independent research showing that nearly half of Scottish farms are pausing or cancelling investment due to fiscal pressures.
“The government must not prejudge the outcome of the review,” Mr Connon added. “The mental and financial strain on farming families is growing. Ministers need to listen and act before these proposals cause irreparable harm.”
Baroness Batters is a former NFU president.
UK environment secretary Steve Reed said: “Backing British farmers is the backbone of all work to support rural economic growth and boost Britain’s food security.
“We have taken strong action to protect the future of the sector with the New Deal for Farmers. But we must go further and faster as part of our Plan for Change to put money into the pockets of farmers and drive growth.
“That is why I am delighted to appoint Baroness Batters, and her years of experience as a leader during a time of great change in British agriculture make her uniquely placed to provide recommendations on tackling the deep-rooted problems holding the sector back and support farmers’ long-term profits.”
Baroness Batters said: “I will leave no stone unturned in trying to find solutions to boost farm profitability. But we should be under no illusions how difficult this work will be.
“There will not be one ‘silver bullet’ to fire but I’m hopeful this review can make a difference to a sector that produces the nation’s food, underpins the rural economy and delivers so much for the environment.”