UK Farmers Face Financial Strain Amid Budget Cuts and New Inheritance Tax
In This Article
HIGHLIGHTS
- The UK government plans to impose a 20% inheritance tax on agricultural assets over £1m from April 2026, sparking concerns among farmers.
- The Labour government is reducing the farming budget in England by £100m annually, despite promising to maintain post-Brexit subsidy levels.
- The Environmental Land Management schemes (Elms) funding is set to increase to £2bn by 2028-29, but farmers argue this is misleading.
- Farmers are protesting against the new tax and budget cuts, citing increased financial pressures from extreme weather and rising costs.
- The government claims to support food security and sustainable farming, but farmers feel the measures fall short of their needs.
The UK farming sector is grappling with significant financial challenges as the government introduces new policies that could impact the future of agriculture. Despite a recent spending review promising a £2.7bn boost to agriculture, tensions remain high between farmers and the government over planned changes to inheritance tax and budget allocations.
Inheritance Tax Concerns
From April 2026, the government plans to implement a 20% inheritance tax on agricultural assets exceeding £1m, a move that has been met with strong opposition from the farming community. Tom Bradshaw, President of the National Farmers' Union (NFU), expressed concerns about the "human impact" of this policy, stating it poses a "very real threat" to farming businesses. He emphasized the need for the government to prioritize both food production and land management, especially in a volatile global environment.
Budget Cuts and Financial Pressures
In addition to the inheritance tax, the Labour government is reducing the farming budget in England by £100m annually. This decision has been cautiously received by farming and nature groups, who feared even deeper cuts. However, the NFU has criticized the move, arguing that it contradicts previous promises to maintain post-Brexit subsidy levels. Farmers are already feeling the squeeze from extreme weather and rising input costs, and these budget cuts could exacerbate their financial strain.
Environmental Land Management Schemes
The government has pledged to increase funding for Environmental Land Management schemes (Elms) to £2bn by 2028-29. While this is presented as a significant uplift, NFU's senior economist, Sanjay Dhanda, called it "misleading," noting that previous funding levels were not fully utilized. The Elms program, designed to reward farmers for environmental improvements, is set to replace the Basic Payment Scheme by 2028.
Government's Stance on Food Security
Despite the controversies, the government maintains that food security is a priority. Farming Minister Daniel Zeichner highlighted investments in sustainable food production and nature recovery, asserting that the government is committed to supporting British farmers. However, many in the farming community remain skeptical, feeling that the measures do not adequately address their concerns.
WHAT THIS MIGHT MEAN
The introduction of the inheritance tax and budget cuts could lead to increased financial instability for UK farmers, potentially resulting in more protests and calls for policy revisions. If the government fails to address these concerns, there may be a push for more substantial reforms to support the agricultural sector. Experts suggest that balancing environmental goals with the economic realities of farming will be crucial in maintaining food security and the viability of the industry. As the situation evolves, the government's ability to engage with and support farmers will be pivotal in shaping the future of UK agriculture.
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UK Farmers Face Financial Strain Amid Budget Cuts and New Inheritance Tax
In This Article
Daniel Rivera| Published HIGHLIGHTS
- The UK government plans to impose a 20% inheritance tax on agricultural assets over £1m from April 2026, sparking concerns among farmers.
- The Labour government is reducing the farming budget in England by £100m annually, despite promising to maintain post-Brexit subsidy levels.
- The Environmental Land Management schemes (Elms) funding is set to increase to £2bn by 2028-29, but farmers argue this is misleading.
- Farmers are protesting against the new tax and budget cuts, citing increased financial pressures from extreme weather and rising costs.
- The government claims to support food security and sustainable farming, but farmers feel the measures fall short of their needs.
The UK farming sector is grappling with significant financial challenges as the government introduces new policies that could impact the future of agriculture. Despite a recent spending review promising a £2.7bn boost to agriculture, tensions remain high between farmers and the government over planned changes to inheritance tax and budget allocations.
Inheritance Tax Concerns
From April 2026, the government plans to implement a 20% inheritance tax on agricultural assets exceeding £1m, a move that has been met with strong opposition from the farming community. Tom Bradshaw, President of the National Farmers' Union (NFU), expressed concerns about the "human impact" of this policy, stating it poses a "very real threat" to farming businesses. He emphasized the need for the government to prioritize both food production and land management, especially in a volatile global environment.
Budget Cuts and Financial Pressures
In addition to the inheritance tax, the Labour government is reducing the farming budget in England by £100m annually. This decision has been cautiously received by farming and nature groups, who feared even deeper cuts. However, the NFU has criticized the move, arguing that it contradicts previous promises to maintain post-Brexit subsidy levels. Farmers are already feeling the squeeze from extreme weather and rising input costs, and these budget cuts could exacerbate their financial strain.
Environmental Land Management Schemes
The government has pledged to increase funding for Environmental Land Management schemes (Elms) to £2bn by 2028-29. While this is presented as a significant uplift, NFU's senior economist, Sanjay Dhanda, called it "misleading," noting that previous funding levels were not fully utilized. The Elms program, designed to reward farmers for environmental improvements, is set to replace the Basic Payment Scheme by 2028.
Government's Stance on Food Security
Despite the controversies, the government maintains that food security is a priority. Farming Minister Daniel Zeichner highlighted investments in sustainable food production and nature recovery, asserting that the government is committed to supporting British farmers. However, many in the farming community remain skeptical, feeling that the measures do not adequately address their concerns.
WHAT THIS MIGHT MEAN
The introduction of the inheritance tax and budget cuts could lead to increased financial instability for UK farmers, potentially resulting in more protests and calls for policy revisions. If the government fails to address these concerns, there may be a push for more substantial reforms to support the agricultural sector. Experts suggest that balancing environmental goals with the economic realities of farming will be crucial in maintaining food security and the viability of the industry. As the situation evolves, the government's ability to engage with and support farmers will be pivotal in shaping the future of UK agriculture.
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US Supreme Court Ruling on Tariffs Sparks Uncertainty for UK and Global Trade
Centrica Faces Profit Decline Amid Warmer Weather and Market Challenges
UK Government Eases Deer Culling to Protect Woodlands and Farmland
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