Inheritance Tax Reforms Biggest Issue Facing Farmers

The Farming Profitability Review, written by Baroness Minette Batters, former chair of the National Farmers’ Union, has identified inheritance tax reforms as the biggest issue facing farmers. The industry is "confused and frightened" by the upcoming changes, which will see farms with assets worth over £1 million pay 20% tax.

Impact of Inheritance Tax Reforms

The reforms, due to come into effect next April, will have a significant impact on smaller farming businesses. Many farmers have protested in London, arguing that the changes will make their businesses unviable. The agricultural sector is concerned about the potential loss of thousands of farmers due to the inheritance tax payments.

Recommendations for Improvement

The report makes 57 recommendations to improve profitability, with a focus on restoring the balance between food production and the environment. Baroness Batters highlights the need for closer collaboration between government, farming, and the food industry. The report also suggests expanding "Brand Britain" through increased exports and supermarket sales, as well as ensuring better monitoring of supply chain fairness.

Government Response

In response to the report, the Department for Environment, Food and Rural Affairs has announced the formation of a new body to bring together senior leaders from agriculture, food production, retail, finance, and government. Environment Secretary Emma Reynolds stated that the new Farming and Food Partnership Board will strengthen food production in the UK. The government will set out its comprehensive response in a new 25-year roadmap for agriculture, due to be published next year.

Food Security and Climate Change

The report highlights the threats of climate change to agriculture, which accounts for 70% of the UK’s total area. Baroness Batters emphasizes the need to ensure food security as national security, particularly in light of increasingly extreme weather conditions and the ongoing war in Ukraine. With a growing population of 69.7 million people in the UK, the need for a secure food supply is more pressing than ever.