Members of Congress demand a one-year delay in proposal

The MPs’ committee warns that changes to farm estate tax should be delayed for one year without compromising alternative plans for small family businesses need to be considered properly.

The government plans to tax at a 20% rate, with agricultural assets worth more than £1 million (half of the usual interest rate) announced protests in the fall budget.

The Environment, Food and Rural Affairs (EFRA) Commission said in a report released Friday that the changes were conducted without “enough consultation, impact assessment or affordability assessment.”

The government said its inheritance tax reform was “critical” and its commitment to farmers was “firm”.

The EFRA report said tax reforms “threatening to affect the most vulnerable”, but delaying the implementation of the policy until April 2027 will give these farmers more time to seek “appropriate professional advice.”

Tom Bradshaw, president of the National Farmers Union (NFU), said the delay “will not reduce the huge pressure on old farmers.”

He said the policy remains “substantially unsuitable, destructive, well-built and must be changed”.

The government said the changes will only affect the 500 richest farms each year, but the NFU and the National Land and Business Association (CLA) estimate that it could affect as many as 70,000 farms overall.

The committee also warned that the government’s sudden shutdown of sustainable agricultural incentives (SFI) environmental payment schemes “affected government trust” and made many farmers “possibly unfeasible.”

In March, when the SFI program was signed to more than 50,000 farm businesses, the NFU described it as another “fight” to farmers.

After that, the Department of Environment, Food and Rural Affairs (DEFRA) announced that it will allow SFI applications to be made within two months of the closure.

But the committee said lessons should be learned and there is an “extreme need to restore trust”.

EFRA committee chairman Alistair Carmichael said farmers' confidence and well-being were negatively affected.

He added: “However, the government appears to be refuting farmers' concerns and ignoring what it proved during the protests that tractors gathered in Westminster and around the country.”

The CLA, representing 28,000 farmers and rural businesses, urged the government to reconsider its “current catastrophic policy” on inheritance taxes.

It said the government should consider an alternative “rebate” scheme under which estate tax should be included in 100% agricultural and commercial property relief if sold within a certain period after death, but estate tax should be collected and should be paid from the proceeds of the sale.

CLA President Victoria Vyvyan said the “strike back” proposal would limit damage to family businesses while “purchasing land to shelter wealth to earn short-term gains.”

“The government has dug a deep hole by targeting family farms and businesses and now it has to stop, listen and consult,” she said.

But a government spokesman said three-quarters of the estate will continue to be exempt from estate tax under its changes, and the remaining quarter will be “pay half of the estate tax paid by most people”.

He added that payments could be distributed over 10 years without interest.

Details of the new SFI plan will be announced after an upcoming spending review.