Rachel Reeves needs to rid herself of the alleged farmers. It’s becoming clear, if it’s not in budget time, it’s not going to go away.
Their cry of protest, the petition against the proposals to tax inherited farms grows longer.
Tractors in Parliament Square Never a good look, especially when it makes a Labor Government look like it doesn’t understand the concerns of rural communities – which, if ministers are honest, they don’t.
Worse still for the Chancellor, farmers have a strong case for a fundamental rethink of the new tax system, which is why they will be in Westminster again this weekend, experts in hand, gathering more allies every day.
Last week, Tesco joined Asda, Co-Op, Lidl and Morrisons in unbundling the levy. Echoing the National Farmers’ Union (NFU), Tesco said the UK’s “future food security is at stake” and that the government must stop introducing an inheritance tax on farms worth more than £1 million.
Multiplied by the number of NFU supporters, the Office for Budget Responsibility (OBR) released its analysis of the tax changes, due to take effect in April.
In its role as an independent forecaster for the government, the OBR makes judgments about how much taxes it will raise to judge how much the Treasury will need to borrow each year to meet spending plans.
She said the Treasury figures were at best uncertain and at worst could have a big hole where millions of pounds of tax receipts should be.
In the next decade, most older farmers are unlikely to find a way to avoid the tax, meaning many who inherit will have to sell farms that in some cases have been in the same family for generations.
After what she calls OBR in the medium term, it is possible that the treasury will earn very little, having turned farmers into small aristocrats. As any Duke or Earl knows, tax planning occurs from the moment one is born. They live in the proceeds of tax-free trusts, protected from HMRC. Farmers may have to do a lot.
Tax expert Dan Nedel says the NFU is exaggerating when it claims 75% of farms would be poached by the measure, but agrees “the proposal fails to raise as much revenue from the people it is actually intended to”.
If we go back to last October, the farm tax was one of Reeves’ most popular measures Its first budget. Reeves said she wants to end a situation where anyone who inherits a farm from their parents charges tax-free. (They also inherit equipment through a business trade that is exempt from the relief tax.)
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Like one of her first attempts at raising money – Cancellation of winter fuel allowance For all but the poorest pensioners – the move has been touted as a way to end universal subsidies enjoyed by the wealthy. Only the largest farms claimed tax relief, the logic went, and this would always be the case, justifying the introduction of a 20% tax (half the standard rate) above the £1 million threshold for a single farmer.
There are many ordinary, asset-happy farmers who will be caught out by the new rules, the NFU said, not meaning the wealthy on high incomes – a point the organization constantly makes and one that resonates with the reality of farming across much of England and Wales.
Many farmers scratch a living on a piece of countryside that has become very valuable, and nearby land is often bought and sold by wealthy individuals who want to turn their money into assets that do not have inheritance tax. Do they want the farm? No, they just want to avoid their wealth falling into the hands of the tax authority.
This is a topic in ITV Drama thereand Starring Martin Clunes as a Welsh farmer who has to reshoot three times in 10 years to stay afloat. His plan is to keep the business going for his son, but his income is so small that the pressure to sell to a developer is constant.
If Labour’s plan is to reorganize agriculture to eliminate thousands of farms scraping by for a living, then the tax is a brutal and indiscriminate one at that. If that is taxes on those who are truly wealthy, it misses the mark.
Someone like Guy Singh-Watson should be a supporter of the tax change, but he soon discovered that the tax threshold – even if raised to £3 million by farmers pooling their allowance with a partner and using other reliefs – prices were high. the Previous owner From Riverford Organic Food Business says so There is a need to rethink. So does Needle.
There are wealthy landowners who should pay more tax, but with the Chancellor preparing to issue a technical analysis of the reform, she should admit that this is a bad plan and take the opportunity to announce a wholesale review instead.
The plow will have farmers on its doorstep for the rest of Parliament. They know they have a strong case – and unlike winter fuel allowance claims, they won’t give up.
