Rachel Reeves’s ‘tractor tax’ will hit 2,500 farmers a year, 75,000 over a generation – five times as many as the Chancellor claims because she doesn’t understand the industry, a leading expert has said. The Telegraph has more.
Treasury analysis that claims the Chancellor’s changes to agricultural relief on inheritance tax will affect just 500 farmers each year is “wrong” because it has not properly understood the industry, the Central Association of Agricultural Valuers (CAAV) has said.
The figures have also been analysed by BBC Verify, the broadcaster’s fact-checking service, which has sided with the Treasury while dismissing significantly higher numbers published by the industry.
However, Jeremy Moody the Secretary and Adviser to the CAAV said the measures will in fact hit 2,500 farmers each year, five times the Treasury’s estimates.
He said: “They’re wrong because they’re working on an incomplete picture.”
“What they got wrong is, they didn’t know what to ask and HMRC couldn’t answer them even if they had.”
Over a generation, Mr. Moody said 75,000 farms will be affected by the changes.
Currently, farmers can claim up to 100% relief on inheritance tax on their land and buildings through agricultural property relief (APR) and up to 100% relief on their operational equipment and livestock via business property relief (BPR).
However from April 2026, only the first £1 million of both their land and business combined will qualify for 100% relief through APR and BPR under changes announced by Ms. Reeves last month. Above this threshold, inheritance tax will be charged on their estates at an effective rate of 20%. Estates are normally charged 40% but farmers will continue to benefit from relief on half of that amount.
The Government has been publicising the BBC’s analysis of the Treasury figures, with Sir Keir Starmer telling reporters last week: “All of you can check out what that means in terms of the impact. I think the BBC has already done it.”
While the Government has insisted that this analysis incorporates claims for both BPR and APR combined, Mr. Moody said it has approached the calculation in the wrong way.
The Treasury analysis was based on how many estates claimed APR and then claimed BPR, but this has “completely missed” the people who are farmers but only claim BPR, Mr Moody said.
The Treasury and the BBC’s analysis has therefore missed people who own the land but do not own the farmhouse (such as those in farming partnerships), people who only have tenanted businesses and therefore do not own land or buildings, and farmers who are shareholders in family companies.
Mr. Moody said: “All of these categories come together to produce really quite a serious number of people and some of them are really quite significant claims. A dairy farm with 200 dairy cows will start with £500,000 worth of dairy cattle before anything else.”
Incorporating estimates for all of these people, the number of individual taxpayers who will be affected will in fact be 2,500 per year, Mr. Moody said.
Worth reading in full.
Stop Press: Farmers can marry their mother-in-law to avoid the new tax, it has emerged, as spouses still qualify for 100% tax relief. As long as everyone’s clear where they stand on conjugal rights…
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I took the term “Tractor Tax’ in the headline literally. Don’t be giving this anti-farmer government ideas!
Same here. I thought ‘bloody hell, not a new tax on farmers.’
And exactly, don’t give the crooks ideas.
I’ve been doing it wrong.
Don’t forget that BPR is reduced for family businesses as well which will see them forced to close down to sell off the assets to pay the bill.
But if the business concerned was nothing to do with farming, presumably it would not qualify for the relief at all. Plenty of work for accountants to recommend various structures to minimise taxation, perhaps.
To all of the socialist scumbags who have been telling farmers to use the seven year rule to hand the farm over, the problems with this are numerous. The farmer will have to move out of his home or pay rent to his children on which they would be taxed. If the child is unmarried and dies before their parents, quite possible in this industry, the parents would then be taxed to reinherit their own farm. Finally, let’s not forget that the next tax Reeves will be introducing in the next budget will almost certainly be a gift tax, removing the gifting option.
All this for a measly sum comparatively. The uni party happily f****d away 30 billion on track and trace and p****d another 30 billion fighting the Russians.
What an absolute bunch of c**ts these politicians are. Livid.
Stop Press: Farmers can marry their mother-in-law to avoid the new tax
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Well, that’s Norfolk sorted then!
The billionaire class think that they will always be immune from shortages because they will have enough money to see them through one way or another. There is only one way to disabuse them of this conceit and it is if the population as a whole allies with the producers of food. Such an alliance couldn’t really be defeated unless they decided to scarper to billionaire mansions far away and that would be good riddance anyway. This is who these people represent hence their attempt to make it sound like an alliance with Blackrock is a beautful thing.
Labour communists are envious idiots. They are all townies who understand nothing. They have been wrecking the British economy since they got into power in 1945. Every time Labour are in office they do enormous damage. And the tories started adopting socialist ideas and policies from Major onward, so the country has been fewked over totally. We need a right wing, free enterprise, freedom of thought and speech government for 30 years to restore this country.