MPs demand delay to Inheritance Tax hike for farmers amid havoc warning

Furious MPs have warned that sweeping inheritance tax reforms could wreak havoc on Britain's family farms - unless the Government slams the brakes on plans to overhaul key tax reliefs as early as next year.

In a hard-hitting report published today, the cross-party Environment, Food and Rural Affairs (EFRA) Committee has demanded ministers delay their proposed changes to Agricultural Property Relief (APR) and Business Property Relief (BPR) until at least April 2027.

They say the pause would give farmers vital breathing space and protect some of the most vulnerable rural businesses from spiralling uncertainty.

The report warns that the Government's current approach risks triggering "unintended consequences", with one stark statistic showing confidence among farmers has plunged from 70% to just 12% following last year's Autumn Budget.

A staggering 84% of those surveyed also reported a hit to their mental health, citing sudden policy shifts and the controversial closure of key farm funding schemes.

Chair of the EFRA Committee, Alistair Carmichael MP, accused ministers of eroding trust and riding roughshod over farming communities with confusing announcements and poor communication.

"The Committee has taken its work extremely seriously in developing this report and in agreeing our findings. There is an opportunity here to rebuild trust and confidence in the farming sector and I hope that the Government will take our recommendations seriously," he said.

"The way in which the Government has behaved over recent months has clearly negatively affected the confidence and wellbeing of farmers.

"Changes to APR and BPR in the Autumn Budget, the sudden closure of the Capital Grants scheme in November 2024, and the abrupt ending of SFI applications in March have all led farmers to feel that they cannot rely on the Government to live up to its commitments.

"The Government, however, seems to be dismissing farmers' concerns and ignoring the strength of feeling evidenced in the months of protests that saw tractors converge on Westminster and up and down the country."

The Committee acknowledged the Government's intention to clamp down on wealthy investors exploiting APR and BPR to dodge inheritance tax. But it criticised the lack of consultation and urged ministers to explore alternative reforms that would not penalise genuine working farms.

"Reforms threaten to affect the most vulnerable," MPs warn, adding that the full impact on food security, land values, and the viability of tenant farmers remains "disputed and unclear".

Farmers were also left reeling by the sudden closure of the Sustainable Farming Incentive (SFI) earlier this year - a move the Committee said "affected trust in the Government" and left many without expected funds.

Although ministers later announced a limited reprieve for farmers who had already started applications, MPs are now calling for an alternative funding scheme to be in place no later than September 2025, to ensure farmers are not left high and dry.

The report paints a picture of disarray at the heart of Defra, citing "a pattern of poor communication and last-minute decision-making" including the abrupt end to the Capital Grants scheme in late 2024, only to be reversed later.

MPs said the situation demands urgent action, both to steady the sector and to deliver on the Government's ambitions for food security and environmental protection.

"Farmers ought to be the essential element in the Government's plans both to achieve food security and to restore and protect the environment," said Mr Carmichael.

"When they make decisions for their businesses, farmers have to plan for the long term - but the landscape they are operating in currently is unclear. Farmers urgently need clarity, certainty and advance notice of changes - they cannot be expected to rethink their businesses on a whim."

The Committee is urging Defra to lay out its full vision in the upcoming 25-year Farming Roadmap, uniting disparate policies into one coherent strategy - and, crucially, to start speaking clearly and honestly with the people who feed the nation.