'Government wants to boost farm profitability, but inheritance tax bills could wipe out profits'

The Government has announced measures it says will boost farmers' profitability - but the CLA says farms and businesses face their profits being wiped out by inheritance tax bills.

In a speech at the Oxford Farming Conference, Defra Secretary of State Steve Reed set out how the Government will work with farmers to deliver "a profitable farming sector and unlock rural growth". He said this will include a "cast iron commitment" to food security while introducing reforms to help farmers diversify their income streams to support them during poor harvests.

With a tractor rally protesting about the Treasury's plans to cap vital inheritance tax reliefs being held outside the venue when he spoke, Mr Reed also said the Government will monitor food currently bought in the public sector and where it is bought from.

It comes against a backdrop of anger about the Government's planned changes to agricultural property relief (APR) and business property relief (BPR).

CLA President Victoria Vyvyan said:

“The Secretary of State says he wants to improve farm profitability, yet family farms and businesses face having what profits they do make wiped out by inheritance tax bills. Capping vital inheritance tax reliefs will threaten their viability and not deliver the growth and investment the government says it wants to achieve.

“Farmers are playing their part in enhancing the environment and delivering public goods, but they also need to be able to run viable, profitable businesses. The government’s freezing of the farming budget and lack of ambition for the rural economy is hitting confidence.

“To grow the rural economy, the government must invest in productivity, strike new trade deals and defend farm businesses from drought and flood.”

The Government also said:

• It will work with the sector to "understand fully how existing permitted development rights are working" for farmers so they can convert larger barns into farm shops or holiday lets.
• It will help farmers make additional money from selling surplus energy from solar panels and wind turbines by accelerating connections to the grid and support them during difficult harvests and supply shocks.
• It wants to "uphold and protect" our high environmental and animal welfare standards in future trade deals.

Stay tuned for further analysis from the CLA.