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• NFU condemns lack of consultation • Destructive and bungled in delivery • ‘Farmers cannot afford this change’ Industry leaders have condemned the government... Chancellor under fire after autumn Budget bombshell

• NFU condemns lack of consultation

• Destructive and bungled in delivery

• ‘Farmers cannot afford this change’

Industry leaders have condemned the government for unveiling plans to impose inheritance tax on farmers without any consultation.

Farming families were left stunned by the shock decision – announced by Chancellor Rachel Reeves in the autumn Budget – to impose 20% inheritance tax on farming assets worth more than £1m from April 2026.

‘Bad data’

It came despite repeated pre-election pledges – both in public and in private – that agricultural property relief would remain untouched should the Labour Party win the general election that propelled it to power this summer.

As 10,000 farmers descended on London for a mass protest, NFU president Tom Bradshaw described the tax as a “shocking policy built on bad data and launched with no consultation with anybody that understands. Not even Defra”.

“To launch a policy this destructive without speaking to anyone involved in farming beggars belief,” added Mr Bradshaw. “It’s not only been bungled in delivery, it’s also nothing short of a stab in the back.”

Country Land and Business Association Victoria Vyvyan said: “All CLA modelling shows that farmers cannot afford this change. There is not the profitability in the farm or the diversified business to pay this tax.”

Change needed

Both agricultural property relief and business property relief were necessary tax reliefs for multi-generational rural businesses, said Ms Vyvyan. “The government is behaving as if we don’t already pay taxes – believe me, we pay tax.”

Independent tax expert Dan Neidle, of the Tax Policy Associates think tank, initially appeared to support the government policy. “The various dire predictions I’m reading don’t seem very realistic,” he said.

But after scrutinising the government’s plans more closely, Mr Neidle reached a different conclusion.

“The Budget hits farmers too hard and tax avoiders too lightly. It needs to change,” he said.

It has also emerged that Defra secretary Steve Reed was only told about the Treasury’s inheritance tax plan on the eve of the Budget. Even so, he insisted that most farms and estates would not be affected by the tax.

Unfairly high

Reforms announced at the Budget would help raise money to fix the public finances while protecting small family farms from unfairly high inheritance tax, Mr Reed told last month’s CLA annual conference.

Defending his insistence last year that labour would not reduce agricultural property relief, Mr Reed conceded that farmers deserved an explanation. “That was our position at the time,” he said.

“I gave that answer because we did not know the full extent of the country’s financial crisis. None of us could have because, as the OBR – the independent Office for Budget Responsibility – has since told us, the previous government covered it up.

Defra mothballs capital grants scheme

An unexpected surge in applications has prompted Defra to stop making offers under its capital grants scheme.

Defra confirmed the postponement after farmers raised questions about the status of the Capital Grant scheme. Farmers had been reporting significant delays with the applications – with some left waiting months for replies.

The Central Association of Agricultural Valuers said it had been made aware that the Rural Payments Agency was reviwing the scheme – in light of an increase in applications and growing budget pressures.

“They are not issuing any offers at the moment,” said CAAV secretary and adviser Jeremy Moody..

A Defra spokesperson said: “We will simplify and rationalise our grant funding, ensuring that grants are targeted towards those who need them most and where they can deliver the most benefit for food security and nature.”

The spokesperson added: “We will confirm future grant rounds in due course.”