On 4th December, a vote was held in Parliament on the Family Farm Tax, after it emerged that more than 100,000 farms across the country will be hit by new inheritance tax laws announced at the Autumn Budget on 30th October 2024. Analysis has found the raid on family firms will put more than 125,000 jobs at risk and cost the economy £10 billion.
In the Budget, the Chancellor announced that the rate of Agricultural Property Relief (APR) and Business Property Relief (BPR) will be reduced to 50% after the first £1 million on combined agricultural and business from April 2026.
It means 20% inheritance tax will be charged on estates with business and agricultural assets worth more than £1 million. The government has confirmed that everything from farm tools and vehicles to livestock and fertiliser will be included in the valuation of farms.
The Chancellor estimated that the change would affect less than 500 farms a year. With farmland is valued at an average of £10,000 per acre, the reformed relief would only cover farms of up to 67 acres as the average farm size in England being 217 acres. It could result in 70,000 farms receiving bills for £293,220.
More than 170,000 people have signed the petition, calling for the tax to be axed. This includes more than 1,000 signatories from the constituency of South Shropshire. 3,686 farm holdings in Shropshire are understood to be affected.
The vote was held at the end of one of the allocated Opposition Day debates. Representing South Shropshire, Stuart Anderson MP took part in the debate. He warned that the government's policy would put British food security at risk, increase food prices, and contribute to higher inflation.
It followed the recent national day of action organised by the National Farmers' Union, where Stuart showed his support for farmers who stand united in their opposition to the tax, which will lead to farming families facing tax bills of hundreds of thousands of pounds.
As Stuart reported in November, it means that the government has broken its promise to not change agricultural property relief so farmers could continue to pass on their farms to family members when they die
Concerns have been raised that families will have to sell their farms to pay the bill, with the Country Land and Business Association (CLBA) suggesting that the average 250 acre arable farm will have to sell 20 per cent of its land to pay the bill.
Stuart has said that the tax would result in less farmland and home-grown food - with higher prices for all of us in shops and supermarkets, as the price for cucumbers, tomatoes, peppers, and aubergines is estimated to increase by an additional 10-20 per cent.
Stuart Anderson MP said:
"In Parliament, we forced a vote on the horrific family farm tax that this new government is trying to force through. The government's tax hike was announced without any consultation. It will be devastating for family farmers in South Shropshire and beyond, who have proudly cultivated the land and produced the food that we eat for many generations. Over 170,000 people, from across the country, have signed our petition to axe the tax. This vote was the opportunity for the government's MPs to stand united with us, the farming communities, and hold its ministers to account on this brutal act of rural vandalism, which will be dreadful for us in South Shropshire."
Shadow Farming Minister Robbie Moore MP said:
"Without a doubt, Labour's budget is going to have catastrophic consequences on the whole of the farming community - not least with their desire consequences on inheritance tax but also through national insurance contributions and the increases associated with that and of course the delinked payments that are reducing straight away next year. But the big issue is the family farm tax. That's what today's vote is all about, making sure that we're holding Labour to account on the decisions and the choices that they have made that's going to negatively impact our farming community."
A petition calling on the government to reverse the Family Farm Tax has been signed by more than 170,000 can be found at stopthefarmtax.com.
