The UK farming community has reacted with outrage to the Chancellor's budget announcement that inheritance tax relief for farms will be capped at £1 million.
The National Farmers’ Union (NFU) branded the decision a “disastrous budget” for family farms, warning it could dismantle generations of farm heritage, forcing families to sell land and threatening the future of British agriculture.
Nigel Jenney, Chief Executive of the Fresh Produce Consortium (FPC) voiced his dismay and frustration at the news, saying: "How does Government expect to feed and promote the wellbeing of the nation? On one hand, they claim to be working to strengthen the backbone of UK horticultural production. Yet, on the other, they've imposed a UK border strategy so inefficient and costly that it’s strangling our ability to import vital food and flowers.
"How are we supposed to support struggling consumers and strengthen our own home-grown production under these conditions? A workable solution is long overdue," Jenney continued.
Under the new policy, due to take effect in April 2026, combined business and agricultural assets up to £1 million will remain inheritance tax-free, but assets above that threshold will only receive a 50% relief, effectively imposing a 20% tax. Many farmers argue that this cap will barely cover even the smallest of farms, potentially driving small-scale farming families out of the industry altogether.
Generations in Jeopardy
Richard Payne, a Somerset farmer who has run his family farm for years, told the BBC he had already advised his son to seek other career options. “With this tax change, our family business becomes completely unviable,” Payne explained.
“The £1 million limit will only cover the smallest farms, leaving mid-sized and larger family farms vulnerable to corporate takeovers. This decision risks reshaping the landscape of UK farming, pushing us towards mega-farms and factory-style operations.”
Holly Purdey, vice-chair of the Nature Friendly Farming Network England, voiced similar concerns. She highlighted how “longevity and generational thinking” are key motivators for farmers, driving their dedication to sustainable land stewardship. These values, she warned, could be eroded if small farms are sold off. However, Purdey added that any forced sales might offer opportunities for new entrants to buy land and enter the industry.
Broken Promises Ignite Backlash
The backlash comes amid claims of broken promises to farmers, with Shadow Secretary for Rural Affairs Steve Barclay accusing the Labour government of reneging on commitments to protect agricultural property relief (APR). Victoria Vyvyan, president of the Country Land and Business Association, labelled the tax change a “betrayal” that could devastate up to 70,000 farms. She noted that Secretary of State Steve Reed had previously assured farmers APR would remain unchanged.
“It’s nothing short of a betrayal,” Vyvyan said. “This decision puts dynamite beneath the livelihoods of British farming, undermining growth, investment, and the very fabric of our rural communities.”
Tom Bradshaw, NFU President, echoed these sentiments, stating, “This shameless policy reversal will rob the next generation of their chance to carry on British food production, care for the environment, and invest in the future.”
Government Stands Firm Amid Criticism
Despite the backlash, the government defended its decision, stating the change is expected to impact only around 2,000 estates annually. Food Security Minister Daniel Zeichner reiterated the government’s commitment to British farmers, noting that the £2.4 billion farming budget for England will remain intact for 2025/26.
He said, “Our support for farmers and the vital role they play in feeding the nation remains steadfast.”
As tensions rise, the rural community fears this decision could mark the end of family-run farms across Britain.
With trust between farmers and policymakers seemingly fractured, the government faces mounting pressure to revisit what many are calling a “devastating blow” to the future of British farming.
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