IT’S A NUMBERS GAME AS PROTESTS CONTINUE

Government claims around the number of farmers likely to be affected by the Chancellor’s planned changes to inheritance tax continue to be challenged by leading industry players.

Both the NFU and the Central Association of Agricultural Valuers (CAAV) have put forward evidence that the number who will be caught by the change in the rules – something farmers were promised would not be in the budget – will exceed the Government’s figures.

Leading figures in the industry have meanwhile been giving evidence to the Environment, Food and Rural Affairs Select Committee (EFRA), with NFU president Tom Bradshaw reported to have become “emotional” while warning that more farmers could take their lives because of the threat to their livelihoods and family farms.

Farmers themselves have continued to raise public awareness of the issues by mounting more high-profile demonstrations, driving tractors around Westminster in central London and staging go slows on dual carriageways.

Despite farmers continuing to put pressure on the Government on several fronts while calling for the proposals to be put on hold pending wider consultation, Prime Minister Sir Keir Starmer was still insisting as South East Farmer went to press that the "vast majority" of farmers would not be affected by the tax changes.

In contrast, the NFU has put forward research suggesting 75% of family farms will be hit by changes to Agricultural Property Relief (APR) set to be introduced from April 2026 that would mean farm businesses facing an inheritance tax rate of 20% on agricultural assets valued at over £1 million.

The CAAV has suggested that the Government has under-estimated the number of farmers affected by a factor of at least five, meaning that it would hit 75,000 producers over a generation, not 500 in 2026/27.

“Looking at HMRC’s express advice on tax returns, it states that where full business property relief (BPR) applies, as in most farming cases, the values given in tax accounts should be used, not the open market value,” said Jeremy Moody, secretary and adviser to the CAAV.

“Farmers’ accounts for assets that qualify for BPR, like machinery and livestock, are based on historic cost. This means they will be valued at significantly less than open market value.”

The CAAV statement pointed out that the new rules will mean all assets needing to be accounted for at current market value, bringing significantly more people into paying inheritance tax and adding more cost to those already affected.

The CAAV’s research shows that this change will have a particular effect on many livestock farms. “Not only does HMRC allow that the ‘deemed cost’ for cattle in accounts is 60% of market value, but the statutory ‘herd basis’ option for accounting for tax on breeding and production animals is based on the original cost of a herd or flock,” explained Mr Moody.