Union’s Board and members meet MPs of all parties to highlight damage of Government taxation plans
NFU Scotland’s Board of Directors joined fellow farming Union delegates from England, Wales and Northern Ireland in mass lobby of Westminster today (Tuesday 19 November) demanding that the UK Government reverse deeply damaging taxation plans announced in the recent budget.
NFU Scotland said that the new UK Government had an opportunity to build a new relationship with rural Britain but, only five months into its term of office, it risks putting that relationship in jeopardy if it pursues its taxation changes.
Previous promises that taxation changes would not be introduced were not honoured, the UK Government failed to consult with industry on its planned changes and all UK farming unions were united in opposition to the taxation changes proposed.
The Union’s board members, accompanied by other members from around Scotland, met with more than 30 of Scotland’s recently elected MPs where they highlighted that the UK Government’s proposed changes to Agricultural Property Relief (APR) will be devastating to family farms and crofts. As well as bringing unprecedented anger and frustration across the industry, NFU Scotland has stressed that the financial and mental pressures the proposals are putting on family farm businesses is immense.
As well as 1800 farmers participating in the Joint UK Unions mass lobby of politicians, many thousands more took part in a rally and march outside Parliament.
NFU Scotland President Martin Kennedy, who joined fellow UK farming Union Presidents on stage at Church House, Westminster today said: “For a Government to have stepped away from its claim that ‘food security is national security’ and targeted taxation changes at family farms in its first budget has left farming and crofting families deeply angry and frustrated.
“Inheritance tax reliefs give certainty to family farms that they will be able to keep the farm in the family and keep producing food for the nation. Without this, the family will often have little alternative but to sell the farm, or part of the farm, to pay taxes. The resulting breakup of many family farms will have a devastating effect on rural communities which have small family farms at their heart.
“With the spectre of an unrealistic inheritance liability on death, there would be little incentive for a small farm or crofting business owner to take the long-term outlook and to invest in the future of the business. These changes could also result in a contraction in farmland available to rent stifling the ambitions of the next generation of farmers
“We are here in numbers today to send a clear message to Government that it must reverse this decision immediately and sit down with industry to properly consult. Given that the Treasury and DEFRA cannot agree on the impact of the proposals, Government must step back from this precipice.”
“Existing taxation rules are not ‘loopholes’, but targeted and necessary reliefs designed to allow multi-generational businesses to contribute towards our food security and economic growth and a crucial aspect driving the availability of farm tenancies.
“The impact on many Scottish family farms, already stretched to breaking point after a decade of tightening margins, input cost inflation and extreme weather events, could be the final straw for many.”
Notes for Editors
- Changes to inheritance tax mean that combined agricultural and business assets worth more than £1 million will be taxed at a rate of 50 per cent relief, (effective rate of 20 per cent) from April 2026.
- The Chancellor has stated that this would not affect three-quarters of farms and will only impact large landowners. NFU Scotland and other farming unions across the UK dispute this claim.
- We believe that this 73 per cent figure is based on historical APR claims which does not accurately represent the real impact on our industry as it misses the fact that many APR claims would have been alongside Business Property Relief (BPR) claims (aspects of the business that didn’t qualify for APR) – making the APR claim smaller and unrepresentative of the total worth of the farm.
- Furthermore, we believe that HMT's figures on APR are skewed by the inclusion of very small holdings.
- Given the value of land, livestock and machinery, and the average size of a commercially viable agricultural business, the changes are likely to see a significant number of farm businesses brought within the scope of this tax which will have significant potential impacts.
- While the assets may be in excess of £1million, the cashflow and profit are more often a completely different story.
- A small family farm or croft can have a notional high asset value but very low income and liquidity. A modest 200-acre livestock farm could be valued at £1.5m over the IHT threshold. Given the very marginal income profile of such farms, any potential successor would likely have no way of meeting death duties without selling the farm. Or if part of the farm is required to be sold this could result in the business being unviable.
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Contact Bob Carruth on 0131 472 4006