In the letter, farming leaders criticised the lack of consultation with the industry and professional practitioners prior to the announcement of the proposed changes to Agricultural and Business Property Relief.
The Treasury has so far committed to only a very limited ‘technical consultation’ on one specific aspect of the proposals, relating to the policy on charges on property within trusts. That consultation will happen early this year. The letter urges the Chancellor to use this opportunity to carry out a far more comprehensive review of the proposals.
Part of the letter said: “We urge the government to extend this consultation to cover other aspects of the policy, to ensure that it does not have the many negative consequences we believe it will have, in its current form, on family farms, environmental land management and food security.”
Key areas of concern that the group is urging to be part of a bigger consultation include; the impact of the changes on farming profitability and the viability of farming businesses, the options for older individuals for whom, until now, the most effective tax advice had been to hold their farms until death, and the impact on the tenanted sector.
Farming organisations emphasised that expanding the consultation will ensure the reforms to APR and BPR “will better enable the government to meet its fiscal objectives, while ensuring that working farm businesses are not periodically broken up on death, and that land available for tenancies is not reduced, given the serious negative impact these outcomes would have on growth and employment in the rural economy and on the nation’s food security”.
Following the sending of the letter this week, NFU President Tom Bradshaw said: “Farmers are at the heart of our rural communities, producing food and protecting the countryside for future generations, but the government’s proposed changes to inheritance tax put all that at risk.
“As a significant group of food and farming organisations from across the UK, we are urging the Chancellor to listen to our concerns.
“The government must extend its consultation on these reforms to safeguard the future of British farming. Without action, these changes risk tearing apart businesses that have been built over generations, undermining rural communities and jeopardising UK food security for years to come.”
