Seven leading UK retailers, including Tesco, are have publicly expressed over the impact on farmers of the government proposed chages to inheritance tax, outlined in the Autumn Budget.
The retailers’ support for farmers in their ongoing battle to reverse the controversial policy comes as new analysis from the Office for Budget Responsibility (OBR) highlighted the huge impact it would have on older farmers, forcing them to slash investment.
Tesco, Lidl, Aldi and Marks & Spencer have joined Morrisons, the first to declare its support, Co-op and Asda in supporting the NFU’s calls for a pause in the implementation of the policy, while a full consultation is carried out.
In a statement on its website, Tesco said: “One message is loud and clear: farmers desperately need more certainty. After years of policy change, it has been harder than ever for them to plan ahead or to invest in their farms.
“One current area of uncertainty is the proposed change to inheritance tax relief. With many smaller farms relying on APR (Agricultural Property Relief) and BPR (Business Property Relief) we fully understand their concerns. It’s why we’ll be supporting the NFU’s calls for a pause in the implementation of the policy, while a full consultation is carried out.”
Also posting to its website, Lidl has said: “We are concerned that the recent changes to the Inheritance Tax regime will impact farmer and grower confidence and hold back the investment needed to build a resilient, productive and sustainable British food system.
“We, therefore, support the call by the farming community to pause the implementation of those changes and to consult with industry to achieve a mutually beneficial outcome. We will be raising our concerns with Government at any opportunity we get.”
Aldi said: “We all need a farming sector that can confidently invest in its future and continue to produce high-quality British food.”
“That’s why we are supporting the farming community’s calls for the Government to pause the implementation of its proposed changes to inheritance tax until a further period of consultation has taken place.”
M&S released a statement on Wednesday which said: “We support calls for the government to pause the changes to IHT and to consult with the industry to ensure they avoid placing risk on the investment needed to guarantee the future of UK food security, the protection our countryside, and the safeguarding of a vital part of our national life.”
Asda said: “Farming is a vital part of our supply chain. We need a confident farming sector which is able and willing to invest in its future. We have been raising our concerns with Government and will be supporting the NFU’s campaign calling for a pause in the implementation of APR to allow for proper consultation.”
In an email, sent directly to its farmer suppliers, the Co-op confirmed that it had directly contacted relevant government departments to ‘communicate our hope that they will look again at the impact of the IHT/APR changes’. “We have also agreed to sign the UK Farming Unions letter going to the government imminently, thereby joining the call for a re-consideration of the proposed tax changes,” it said.
Morrisons’ head of agriculture Sophie Throup told farmers in a video message that the retailer ‘understands your anger and your frustrations at the inheritance tax and we’re with you’.
“We share your concerns about the long-term future the inheritance tax is going to have on farms, particularly smaller family farms, and we know that you want something done about it. We’ve been raising these concerns at the highest levels of government since November last year and we will continue to do so,” she said.
Pledge
Credit: NFU
The NFU has launch a pledge for farming’s allied industries to sign in support of the campaign. NFU President Tom Bradshaw thanked the retailers for their support.
“Those huge food retail businesses that have come out in support of our call for the family farm tax to be paused and to have a proper consultation are doing so not only because they see what a terrible effect it will have on the farmers they work with, but also because they know that if it is allowed to devastate family farms it will also devastate retailers’ ability to source the high-quality, sustainable food their customers want,” he said.
OBR intervention
The OBR, which oversees government fiscal policies, has published a supplementary forecast on the costing of changes to agricultural and business property relief.
In its report, the OBR says that it is ‘highly uncertain’ whether the measures will raise the £500m the Treasury – which the NFU said did not consult with anyone before launching the changes – claims it will raise.
The report goes on to say ‘it is likely to be more difficult for some older individuals to quickly restructure their affairs in response to the measure’. It also said farmers may seek to limit their tax bills by ‘potentially running down the value of estates’, the BBC reported.
Mr Bradshaw said the report confirms what the NFU has ‘repeatedly warned’ since the Autumn Budget was unveiled – that it will be older farmers who will be hardest hit by the government’s misguided family farm tax.
He added: “One minute they were advised to keep their farms until death to pass them on to the next generation, the next they’re left knowing that if they live beyond April 2026 when the measures come in, their children may have to break up or sell the farm.
“What an appalling position to put elderly people in. Surely it is time for ministers to accept this policy needs the proper consultation it never had?”
“Given the OBR says it’s highly uncertain it will raise the expected amount of money either, surely it is time for ministers to accept this policy needs the proper consultation it never had?”