Farmers welcome supermarkets’ backing in fight against inheritance tax changes

Farmers have welcomed calls by major supermarkets to pause the introduction of inheritance tax for farm businesses.

Tesco, the Co-op and Lidl are among the retailers voicing concerns over the changes, which will end the 100% exemption from inheritance tax on qualifying business and agricultural assets worth more than £1 million.

In a blog on the Tesco website, the company’s chief commercial officer, Ashwin Prasad, said farmers desperately needed more certainty to plan ahead and invest in their farms.

He warned that the proposed change to inheritance tax relief was causing uncertainty, adding: “With many smaller farms relying on APR (Agricultural Property Relief) and BPR (Business Property Relief) we fully understand their concerns.”

He said: “It’s why we’ll be supporting the NFU’s (National Farmers’ Union) calls for a pause in the implementation of the policy, while a full consultation is carried out.”

Tesco said the consultation must be followed by setting a long-term vision for UK agriculture which gives farmers clarity on the role they can play in the UK’s wider transition to net zero, and create the right conditions for farmers to be able to invest in and benefit from the move to a green economy.

In a statement, Lidl said buying British-sourced produce was incredibly important to its customers, and providing security and long-term investment into the country’s agriculture was key to ensure that farmers could continue to produce affordable and sustainable food.

“We are concerned that the recent changes to the Inheritance Tax (IHT) regime will impact farmer and grower confidence and hold back the investment needed to build a resilient, productive and sustainable British food system.

“We, therefore, support the call by the farming community to pause the implementation of those changes and to consult with industry to achieve a mutually beneficial outcome,” the statement said.

Matt Hood, Co-op Food managing director, said farmers are the “absolute backbone of the UK’s food supply” as he pledged commitment to the industry.

“Whilst we are aware that the UK Government has tough choices to make, many of which have the potential to impact many businesses, across all sectors,  I can confirm we have directly contacted relevant Government departments to communicate our hope that they will look again at the impact of the IHT/APR changes.

“We have also agreed to sign the UK Farming Unions letter going to the Government imminently, to call for a re-consideration of the proposed tax changes,” he said.

NFU president Tom Bradshaw welcomed the backing of supermarkets in the ongoing dispute with the Government over the issue.

He said: “Those huge food retail businesses which have come out in support of our call for the family farm tax to be paused, and to have a proper consultation, are doing so not only because they see what a terrible effect it will have on the farmers they work with, but also because they know that if it is allowed to devastate family farms it will also devastate retailers’ ability to source the high-quality, sustainable food their customers want.

“On behalf of NFU members, I want to thank them for their support.”

Despite the calls from supermarkets to pause the introduction of inheritance tax for farm businesses, Downing Street stood by the plans.The Prime Minister’s official spokesman said: “We’ve set out our reforms. It means they mean that the majority of those who claim that relief will not be affected.

“They’ll be able to pass the family farm down to their children, just as previous generations have always done.

“We’ve taken a fair and balanced approach that protects the family farm whilst also continuing to invest in the farming budget, as I say, £5 billion over two years.

“The Secretary of State continues to engage with the sector … to deliver our new deal for farmers and he’ll continue to do so.”