2 weeks Ago
Norfolk's farming families have been dealt a "bitter blow" after it was announced that Labour will scrap the agricultural relief for inheritance tax. Farmers in the county have warned smaller firms could face "serious consequences" over chancellor Rachel Reeves' plans to cut the relief. It will mean people inheriting assets over £1m can expect to pay significantly more, which industry experts warn could push future generations to quit the farming business.
The ramifications could also push food prices up and destabilise the UK's supply chain, according to the National Farmer's Union. It comes at a time when Norfolk's farmers, who have fed the region for countless generations, are already facing tough financial pressures causing strain on their mental health. Kit Papworth, director of contract farming business, LF Papworth (Image: LF Papworth) Kit Papworth, director of contract farming business LF Papworth Ltd, said: “The loss of agricultural property relief is potentially very serious for small family farms which are already struggling.
"It is a bitter blow to those farmers who are hoping to pass on their farm to the next generation. Farming is not sufficiently profitable to pay the tax or for a loan to do so.” Chancellor Rachel Reeves outside Downing Street before delivering her Budget (Image: PA) WHAT ARE THE CHANGES? Ms Reeves has said she will "reform agricultural property relief" from April 2026.
Farming assets under £1m will not be affected but those over £1m will now face a 20pc inheritance tax bill. Ms Reeves, speaking in the House of Commons, said: "This will ensure that we continue to protect small family farms, with three-quarters of claims unaffected by these changes." There are fears the next generation of farmers could struggle due to the changes to inheritance tax.
(Image: Newsquest) 'DISASTROUS FOR FARMERS' Nick Deane, a NFU Norfolk representative who farms at Hoveton, said: "This budget is a huge blow for family farmers here in Norfolk and across East Anglia. “The changes are expected to hit 66pc of farm businesses in England, including many in this region. “If the government thinks this is a tax on the wealthiest people in society, it is very much mistaken.
Nick Deane, a National Farmer's Union Norfolk representative and Hoveton farmer (Image: NFU) “Just because a farm business has valuable assets, it does not mean that all farmers themselves are wealthy. “The average farmer’s return on capital investment is less than 1pc. “This is a tax on hard-working family farms and puts the future of many farm businesses under threat.
" Tom Bradshaw, president of the National Farmers Union (Image: John Cottle/nfu) Tom Bradshaw, president of the National Farmers Union, called the decision "disastrous" for family farms. He said: "This is a disastrous budget for farmers. "The shameless breaking of clear promises will snatch away the next generation’s ability to carry on producing British food.
"This budget not only threatens family farms but also makes producing food more expensive, which means more cost for farmers who simply cannot absorb it and it will have to be passed up the supply chain or risk the resilience of our food production.".
