The Ministry of Finance will look at inheritance tax figures again, says NFU

Defra and the Treasury will “work on the numbers” on planned changes to agricultural land inheritance tax (IHT), following a crisis meeting with the NFU and the threat of militant action by farmers.

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

Mr Bradshaw described Mr Murray’s unexpected presence as a “very important sign that the Treasury may be starting to listen”.

The crux of those conversations was how many farmers would be included in the scope of the changes.

The Treasury has said that 73% of agricultural property relief (APR) claims are less than £1 million and so would not be affected by this policy.

However, the NFU pointed out that Defra figures show that only 34% of farms have a net value of less than £1 million, while the average UK farmland is more than 250 acres (101.71 ha).

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

“There is a huge, huge discrepancy between these figures,” Mr Bradshaw noted.

Referring to that inconsistency, he said Farmer’s Weekly: “They go away and work the numbers to try to find the truth.

“What tells me is that Defra was not consulted on this policy change, otherwise it would have been identified very early on that there were very different figures on which this decision would have been based.”

Mr Bradshaw warned of the mental health impact of the tax attack.

“It is unimaginable the pressure they have put on the industry at a time when the Secretary of State has stood at a podium and said he recognizes the mental health challenges this industry faces,” said he.

“To make this change now and rip the rug out from under the agricultural industry’s feet, when I ruled this out in the first place, I just don’t understand how they think this is acceptable in any way.”

Threat of militant action

The outrage from farmers and rural communities is on a scale Bradshaw says he has never seen before, and while the NFU does not condone this, many were talking about militant action.

“That’s the only way they think their voice will be heard and I think this just shows the strength of the feeling that is bubbling up in every corner of the UK if this change goes ahead in the way it is being proposed today . ”

It is believed that around 75% of UK food production will be within the scope of the changes.

Mr Bradshaw believes this removes any incentives for investment as increasing the value of assets on some farms would take them beyond the IHT threshold.