Tax Troubles in Agriculture: Impact on Farming Succession Plans

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Along with most in the farming industry I was pretty upset that the budget was so hard on the private sector in terms of unjustified tax hikes.. I felt a sense of anger and betrayal particularly as regards the proposed changes to IHT /APR/BPR.  I mean, didn’t  Starmer promise not to interfere with APR and said that ‘ every day seems to bring an existential threat to farming …..losing a farm is not like losing any other business - it can’t come back’   And now this blow.I sat in the house and looked around me. At the  time my brother had popped up with his two young sons which was a delight for my nine year old.  The three of them are budding farmers - there is more farm kit in the house than we have on the farm - and they were on manoeuvres with a vast array of tractors, direct drills, combines, harvesters, loaders, rakes, balers and wrappers.  All seasons merging into one.  My nephew aged 5 came to me with his farm App and pointed to a lovely shiny tractor that he longed to buy, I urged him to buy it, at which point he said that he didn’t have enough ££’s in the bank but scrolled down to a hedge-cutter which came within budget,  happy days.  I mused over whether they would amend said App to include IHT liabilities as an upfront trading expense but then I realised I was being silly….

So what does the future hold for my three budding farmers?  Hard to say.  Twenty-five years of Labour in Wales has not engendered confidence within the industry, largely because they have lost the rural vote and don’t really see the point in farmers or farming -  food is plentiful,  cows are methane belchers, we can import anyway, trees are the way forward and badgers are sacred. And now that their tentacles have spread across the UK their attitude has not abated and our friends across the border are not amused. Tax issue are complex, specialised and case specific.  From the interviews I have heard with MsReeves (and her colleagues interviewed on other channels) they do not actually understand the implications of the changes to these key IHT reliefs.  During the Laura Kunsberg Show Ms Reeves was keen to move away from her 1 million headline exemption figure to 3 million but in so doing she had to make critical assumptions about business and private arrangements within family farming enterprises. This is problematic on so many levels.   I guess the silver lining is that she may have realised how flawed and disjointed her new tax imposition is. 

It is also worrying that The Labour leadership cannot properly define ‘a worker’.  It’s pretty clear that farmers don’t fall within Part 1 of Sir Keir’s definition because they don’t receive an itemised pay slip but I would argue that farmers come within Part 2 of the definition because some may ‘struggle to write a cheque’ - in the sense that funds might be limited.  If farmers aren’t workers then frankly who are?  Keir has also struggled to define a woman - so he has form in this arena.  In conclusion, unless governments of all colours start to value and respect farmers and farming, my three budding successor farmers will struggle to effectively purchase a portion of their farms back from the Treasury, retain a viable unit and survive let alone thrive.  That’s a shame because they are already in training and appear to have an ingredient in their DNA which underpins an unshakeable belief that their destiny lies in producing food for the Nation.  Who is going to break the news?

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