皇家华人

Dear Chancellor,

As farming unions representing farmer and grower businesses across the UK, we are writing to you to express our severe concerns about the recent speculation that Inheritance Tax Reliefs that are crucial to farm businesses, including Agricultural Property Relief (APR) as well as Business Property Relief (BPR), are to be reviewed, and either abolished or curtailed, in the forthcoming Budget.

While farmers and growers understand that your government will need to make some difficult tax and spending decisions in the Budget and over the weeks that follow, they have also listened closely to the words you, the Prime Minister, and others have said about the importance of backing British farming, stimulating growth and investment in the sector, and underpinning our food security and environmental performance through sustained support for British agriculture. Last year, the Prime Minister said that farmers cannot have 鈥渃onstantly moving goalposts,鈥� promising to lead a government that listens to farmers, that 鈥渢hat heeds early warnings, that shows the level of ambition needed to tackle the challenges that you face鈥�.

In particular, with many farmers battered by the loss of direct payments, two years of severe flooding, inflation and extremely volatile market conditions, we welcomed reassurances from the Defra Secretary of State, The Rt Hon, Steve Reed MP, last year that Labour 鈥渉ave no intention of changing APR鈥�.

This speculation is, therefore, extremely concerning. In particular, the impact of removing or reforming IHT reliefs available to farm businesses, and the contribution they make to our food security and our countryside, seem not to be understood within government. Whatever the motivation might be for individuals purchasing farmland, it is clear that the rules for qualifying for these reliefs mean that such investment has become a critical part of the ongoing viability of farms of all types and sizes throughout the UK. APR and BPR are not, as has been suggested, 鈥榣oopholes鈥�, but targeted and necessary reliefs designed to allow multi-generational businesses to contribute towards our food security and economic growth.

APR and BPR underpin viable working farming businesses, of all shapes and sizes. Returns from farming are often extremely modest, with the return on capital employed for farming, after taking into account a wage for the farmer, averaging less than 1%. This means that the vast majority of farm owners would be unable to meet any IHT charge, even if they were to utilise their entire return on capital employed during their career/period of ownership.

Just as importantly, APR is also a crucial aspect driving the availability of farm tenancies across the UK. If APR were to be abolished or curtailed, many landowners 鈥� large and small - would no longer be incentivised to ensure their land is farmed. Often this is done by way of farm tenancies, but also by employing farm managers and workers directly or through contracting arrangements with neighbouring farmers. There is a very real risk that the removal or curtailment of APR will cause a major contraction of farmland being made available for tenancies or contracts, which is often the lifeblood of small family farm businesses and a critical entry point for young and first-time farmers. Given that 64% of UK farmland is occupied by farms that consisted wholly or partly of tenant holdings, and 45% of all holdings in England are either fully or partially tenanted, it is clear that the abolition or curtailment of APR could impact a huge number of farm businesses and their ongoing viability.

This is not only a threat to our food security, but also to the shared ambition of farmers, the government and the public to protect and enhance our farmed environment. The government recently announced that land managed under environmental agreements will qualify for APR. This important decision would clearly be undermined by any changes to IHT reliefs.

Your government has consistently made the case for policies that can drive investment and growth across the economy, something farmers and growers have been delighted to hear. Nevertheless, poorly designed reforms to IHT reliefs on farmland will certainly do the opposite 鈥� drying up investment in farming, reducing our capacity to produce food, reducing the availability of land for farm businesses, and making many family farms 鈥� whether owner-occupied or tenanted 鈥� no longer viable.

Last year the Prime Minister stated that 鈥渓osing a farm is not like losing any other business. It can鈥檛 come back鈥�. This profound insight into the nature of farm businesses demonstrated a keen and very welcome understanding of our sector. And, put simply, the impact of ending or curtailing IHT reliefs on farmland will last not for quarters but for generations. In many cases farms and farmland could be lost to food production forever.

We urge you to consider, as a matter of priority, the impact of any decision you take on APR and BPR on family farms, broader rural businesses, our environmental ambitions and on food security. Farmers have been exasperated over recent years by a tendency for government to introduce and implement policies that have a negative impact on domestic food production in the absence of any impact assessment, and we are hugely concerned that your approach to IHT reliefs will simply be another example of this.

Yours sincerely,

NFU President Tom Bradshaw

NFU Cymru President Aled Jones

President of NFU Scotland Martin Kennedy

President of the Ulster Farmers鈥� Union William Irvine

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