Delay farm tax raid or risk rural ruin, MPs warn Labour

A cross-party group of MPs has urged the Labour government to postpone its planned overhaul of farm inheritance tax (IHT) reliefs, warning the changes could devastate family-run farms across the UK.

In a report (PDF) published on Friday (16 May), the Environment, Food and Rural Affairs (Efra) committee called for the reforms to be delayed until April 2027, citing the risk of “unintended consequences” and a lack of proper consultation.

Under the proposals, unveiled in chancellor Rachel Reeves’ Autumn Budget, a 20% tax would be imposed on inherited agricultural assets valued over £1m from April 2026 – a move that has sparked a widespread backlash from the farming community.

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Industry bodies including the NFU, Country Land and Business Association (CLA), and Tenant Farmers Association (TFA) warn the policy could force families to sell land to pay tax bills, threatening the survival of rural businesses and undermining the UK’s food security.

The Efra committee criticised the government for pushing ahead with the policy without proper consultation or an impact assessment.

The warning follows an online petition launched by Merseyside farmer Olly Harrison, calling for a 12-month amnesty on the government’s proposed changes to agricultural property relief (APR) and business property relief (BPR).

The petition has already gained almost 5,000 signatures.

Farmer survey

A March 2025 survey of farmers revealed that optimism about the future dropped from 70% before the Budget to just 12% afterwards.

The same survey found 84% of farmers felt their mental health had been negatively affected, citing the sudden closures of the Capital Grants scheme and the Sustainable Farming Incentive (SFI) to new applicants.

Efra chairman Alistair Carmichael MP said the government had “ignored the strength of feeling” shown in nationwide farmer protests.

“Farmers urgently need clarity, certainty, and advance notice of changes – they cannot be expected to rethink their businesses on a whim,” he said, warning of mixed messages and a lack of consultation.

“It’s crucial that Defra rebuilds trust with the sector through honest communication.”

Industry backing

The NFU, CLA, and TFA echoed these concerns, all supporting a pause to the IHT changes.

NFU president Tom Bradshaw said: “We’re grateful to the chairman and his committee for consistently scrutinising the cruel inheritance tax proposals announced in the Budget. We are glad to see that it agrees this policy is unfit to become legislation.

“We understand why the committee has asked for a delay, but that doesn’t take the terrible pressure off older farmers. The NFU maintains that this legislation is fundamentally unfit, destructive, badly constructed and must be changed.”

TFA chief executive George Dunn called the policy “not fit for purpose” and urged a more consultative approach to avoid damaging the industry.

CLA president Victoria Vyvyan added: “The government has dug itself into a deep hole by targeting family farms and businesses, and must now pause, listen and consult.”

She urged the government to back the industry’s proposed “clawback” alternative that would protect rural businesses while still generating Treasury revenue.

Farmers Weekly has requested a response from the UK government.