Farmers warn the farming inheritance tax will threaten the UK’s food security
Farming leaders and suppliers are warning that Chancellor Rachel Reeves’ inheritance tax on agricultural goods worth more than £1 million could undermine Britain’s food security, making the UK more dependent on imports.
Senior business figures, including Nigel Murray, managing director of supermarket Booths, have expressed concern that the tax changes could end incentives for domestic food production, which could lead to higher supermarket prices and reduced self-sufficiency.
Murray, whose supermarket sources 60% of its produce from British farmers, stressed that while the impact may not be immediate, “over time there is a real risk that domestic food production could be eroded.” He noted that increased reliance on imports will bring challenges related to environmental impact, animal welfare, and cost.
The President of the National Farmers Union (NFU), Mr. Tom Bradshaw, criticized the tax change, warning that it may force family farms to sell their assets, threatening the next generation of sustaining farming. Bradshaw expressed concern about long-term food security, adding that “every penny saved by the Chancellor goes directly to the next generation when we have to dismantle their family farm.”
ABF, which is the parent company of British Sugar, echoed these comments, with chief executive George Weston calling the tax a blow to the farming community. He urged policy makers to place greater importance on food security and agricultural production in the UK. The NFU is pushing for talks with Sir Keir Starmer and Rachel Reeves, with members of the Labor Party also encouraging dialogue to address farmers’ concerns.
The latest data highlights the vulnerability of UK cereal production to extreme weather, underscoring the importance of agricultural resilience. Previously, agricultural land enjoyed exemption from inheritance tax to promote the continuation of farming. However, Reeves’ new rules, which will come into force from April 2026, will impose a 20% tax on agricultural assets above £1 million, affecting wealthy but poor farms that may struggle to meet the tax bill without selling off parts of their land.
The Treasury insists the policy will only affect a minority of farms, but the NFU estimates the tax could affect 75% of British food production. The government says the new tax structure balances support for family farms and funding for essential public services.
Additionally, the Labor budget quietly closed the truck tax loophole, impacting agricultural workers who rely on vehicles like the Ford Ranger for their jobs. With tax bills on these vehicles expected to rise significantly, farmers like Jon Watt in Suffolk are reporting adjusting their investment plans amid growing uncertainty over agricultural policy.
The policy changes have sparked a national debate about food security, with some industry leaders saying the tax risks closing down an estimated 140,000 British family businesses. The chairman of Family Business UK, Sir James Wates, criticized the tax as “economic illiteracy,” warning it could lead to business closures and job losses, while the Treasury said only a small number of businesses would be affected.
