East MPs hear of farmers' concerns over ‘devastating Budget’

MPs across the East have received a joint letter from CLA members condemning the government’s announcements in the Budget that the farming budget is to be frozen – a cut in real terms – and the proposed introduction of a cap on agricultural property relief (APR) and business property relief (BPR).

Thousands of members across the country have signed the letter to encourage the Chancellor to change course and build a rural economy that can feed the nation, improve the environment, create jobs and generate economic growth.

From April 2026, Agricultural Property Relief (APR) and Business Property Relief (BPR) will be capped at £1m in total per owner. Qualifying assets beyond this level will receive 50% relief from inheritance tax, resulting in an effective tax rate of 20%, after using the nil rate band of £325,000 and residence nil rate band of £175,000.

Proposed inheritance tax changes could place an overwhelming financial burden on UK family farms, according to new modelling from the CLA.

Despite government assurances that “small farms” won’t be affected, the CLA’s analysis shows tax changes could prove a death sentence for many small and medium-sized farms.

According to the CLA’s analysis of model arable farms, a typical 200-acre farm owned by an individual with an expected annual profit of £27,300 would face an IHT liability of £370,000. If spread over a period of ten years, this would require the farm to allocate 136% of its profit each year to cover the tax bill. To meet this bill, successors could be compelled to sell 16% of their land.

Similarly, a 350-acre arable farm owned between a couple in the way the Chancellor expects to be possible with an expected annual profit of £47,780 would face an IHT liability of £475,000, amounting to 99% of its profit each year over a decade.

CLA East Director Cath Crowther said: “MPs can be in no doubt about the anger and dismay the announcements in the Budget have created for rural communities in our region and across the country. Let it be clear, if ministers follow through with their proposals it could be devastating for family farms.

“The Chancellor’s announcements will have consequences for hard-pressed farmers, consumers and the environment. Labour promised to be the party for the countryside, for growth, and vowed not to cut inheritance tax reliefs. Now they have broken these promises.

“The government appears to think inheritance tax reliefs for farmers are ‘loopholes’. In reality, they are targeted reliefs designed to protect Britain’s rural economy, jobs and food security.

“And this isn’t the only challenge that the farming community will be facing. The real term cut to the agriculture budget in England will mean that the Government's own ambitions and targets for nature will be impossible to deliver.

“The fear and anger felt by farmers and rural businesses cannot be overstated. We are in regular meetings with Defra ministers, officials at the Treasury and MPs and will continue to highlight the impact of their action – through evidence based reasoned arguments.

“We have created an area on the CLA website with information, including FAQs and a rebuttal document to address some of the claims being made.

“We encourage members to send us your case studies and examples. Having real life examples of how removing BPR and APR, or the accelerated cuts to basic payments (BPS) will have on your business is essential. The Treasury and other politicians understand the complexities much better if we provide them with hard data that explains the ramifications it has on a business.

“We also encourage you to keep in contact your MP, attend a surgery or invite them out to a farm. We can provide briefings for any meetings outlining the issues and data.”