Government Urged to Delay Tax Changes for Farmers

A group of influential MPs has called on the government to delay controversial plans to change inheritance tax rules for farmers, allowing more time for consultation and better policy formulation. The proposed changes, which aim to bring farms and other agricultural properties into inheritance tax rules, have sparked widespread protests and concern among the farming community.

The Environment, Food and Rural Affairs (Efra) Committee has recommended postponing the overhaul of agricultural property relief and business property relief until October 2026, with implementation to follow in April 2027. The committee argues this would provide vulnerable farmers more time to seek professional advice and allow the government to ensure the policy is properly considered.

The Chancellor, Rachel Reeves, recently announced the new measures in her budget, including a provision that would make inheritors pay 20% inheritance tax on the value of agricultural and business property exceeding £1m. These plans, designed to raise funds for public services and address perceived tax loopholes, have proven highly controversial among farmers. Protests against the policy have seen hundreds of tractors gathering outside government buildings and ministers’ speeches disrupted by demonstrations.

Efra MPs aired concerns about inadequate consultation and impact assessments surrounding the proposed tax changes. The report highlighted risks of unintended consequences and how these measures could disproportionately harm smaller family-run farms. The committee urged the government to improve communication with the farming sector, critiquing what they described as poor and inconsistent messaging from the Department for Environment, Food and Rural Affairs (Defra).

Alistair Carmichael, the Liberal Democrat MP and chair of the Efra committee, criticised the government’s handling of policies affecting farmers. He cited the sudden closure of agricultural subsidy schemes such as the sustainable farming incentive programme as an example of reckless policymaking that has damaged farmers’ trust.

Carmichael stated that rebuilding trust within the farming sector is essential, particularly as farmers remain central to ensuring food security and protecting the environment. He called on ministers to improve their consultation processes and adopt the committee’s recommendations to mitigate potential harm caused by the proposed inheritance tax changes.

The committee’s plea for a delay offers an opportunity for the government to refine its long-term vision for farming, balancing the financial needs of public services with the futures of smaller farms and agricultural communities.