Alistair Carmichael MP, chair of the cross-party Environment, Food and Rural Affairs Committee (EFRA) said the “way in which the Government has behaved over recent months has clearly negatively affected the confidence and wellbeing of farmers”.
He cited changes to Agricultural Property Relief (APR) and Business Property Relief (BPR) in the Autumn Budget, which mean that land cannot be passed down through families without attracting inheritance tax on the estate, as well as changes to other grant schemes affecting agricultural families, saying that farmers feel “they cannot rely on the Government to live up to its commitments”.
Because of this, EFRA is urging the Government to delay announcing changes to the reliefs until October next year, coming into effect in April 2027. The current plan is for them to come into effect in April 2026.
Support for the vulnerable
Carmichael said a pause in the implementation of the reforms “would allow for better formulation of tax policy and provide the Government with an opportunity to convey a positive long-term vision for farming.”
It would also allow farmers to seek professional advice on their finances, he added.
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He said that although MPs in the committee support reforming APR and BPR to close the loophole that allows investors to buy land to avoid inheritance tax, MPs had rejected calls to do this in a way that did not harm small family farms. It asked the Government to consult on these proposals before publishing its Finance Bill in 2026.
EFRA also called on the Government to explain why it didn’t follow alternative policy measures presented by stakeholders such as the Institute for Fiscal Studies (IFS) and the National Farmers Union when it came to the tax.
Failures in communication
The report also criticised the ending of grant schemes for farmers, which happened suddenly and without warning.
It said there was a “a pattern within Defra (Department for Environment, Food and Rural Affairs) of poor communication and last-minute decision-making following rumours and departmental leaks.”
The committee urged that “lessons must be learned from this failure of communication”, saying that “a restoration of trust is urgently required”.
