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OPINION: "Is the Government seriously asking farmers to cover less than 0.5% of the UK's annual debt interest bill?"

Farmers Guardian’s Tom Ryder, hailing from a Cumbria-based family with a history in pedigree livestock breeding, reflects on how the Government’s proposed Inheritance Tax reforms risk overlooking the human realities behind the numbers

clock • 3 min read
OPINION: "Is the Government seriously asking farmers to cover less than 0.5% of the UK's annual debt interest bill?"

It was exactly a year ago today (October 30) when Chancellor Rachel Reeves announced the proposed changes to Agricultural Property Relief (APR) and Business Property Relief (BPR) in the 2024 Autumn Budget.Ìý

It feels as though we are at risk of forgetting just how short-sighted and ill-thought-out these changes are, so I want to take this opportunity to remind everyone how little fiscal sense they actually make.ÌýÌý

Farmers are often cash-poor, even if they appear asset-rich. In the best-case scenario, these reforms could force farmers to sell off vast swathes of their land just to cover the tax bill. In the worst case, it could mean the sale of entire farms.ÌýÌý

READ NOW: Treasury stands firm as MP pleads 'stop the farm tax heist'

How much will IHT reforms actually raise?

At last year's Autumn Budget, the Office for Budget Responsibility estimated that the Government's Inheritance Tax (IHT) reforms would raise £0.5 billion per year from 2027/28 – effectively out of the pockets of this country's food producers.ÌýÌý

You could be forgiven for thinking that, in these tight times, £500 million is not inconsequential, and that this is just the burden farmers will have to bear to help ‘rebalance the books'. But, in the grand scheme of public finances, that £500m is nothing to the Government and everything to us.ÌýÌý

To put it into perspective, total Government receipts for 2024/25 (tax plus non-tax) are forecast at £1.136 trillion. I have done the maths, and the APR/BPR reform would raise about 0.15% of Income Tax receipts each year, which total £330.7bn.ÌýÌý

But I get it, we don't want Income Tax to go up, so looking elsewhere: IHT changes will bring in less than 1% of a year's worth of defence spending; about 1.1% of the estimated ‘tax gap' (unpaid and avoided tax) each year; 0.16% of a year's worth of welfare spending; and, most shockingly, less than 0.5% of the expected annual debt interest repayments – which sit at more than £105bn this year.ÌýÌý

So, is the Government seriously asking farmers to cover less than 0.5% of the UK's annual debt interest bill? This is a drop in the ocean for the Treasury, but it could devastate this country's food producers.ÌýÌý

READ NOW:Ìý'It's been hard lying in hospital thinking how to save my farm': Countryfile segment lays bare mental health toll of IHT reforms

Mental health

We have already reported on distressing cases of poor mental health and even suicides among farmers, driven by the fear and worry about the future of the sector. I pray there will be no more such tragedies.Ìý

So, before April 2026, I urge Rachel Reeves and Sir Keir Starmer (if he remains in post) to consider if it will be worth forcing inheriting farmers to sell off huge portions of their land and assets, which could cripple their financial sustainability, just to pay a tax which amounts to a rounding error in the Treasury's books.ÌýÌý

If that £500m really is so crucial, take it from somewhere else. Britain's food producers need it.

FIND OUT MORE: Farmers Guardian's Save Britain's Family Farms campaign

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