Government shrugs off NI farmers’ tax concerns

Despite claiming to understand the concerns raised, Labour has dismissed the numerous objections to the inheritance tax changes – insisting it alone knows best.

The dismissal of our farmers’ concerns came in the same week another financial analysis came up with stark figures suggesting four out of 10 British farms could go out of business by 2030 due to the Inheritance Tax changes.

In a response to South Antrim MP Robin Swann, who submitted the NI Family Farm Tax petition in Parliament with the support of the Ulster Farmers’ Union calling on the government to stop this devastating policy, the Exchequer Secretary to the Treasury James Murray paid lip-service to the raised concerns before dismissing them.

“The government’s commitment to farmers and the vital role they play in feeding our nation remains steadfast. The government recognise the concerns raised by the farming community, including those in Northern Ireland, and UK government Ministers have met with the Ulster Farmers’ Union since the Budget to listen to their concerns.

“The government are aware of the strength of feeling in Northern Ireland and elsewhere,” he said.

Mr Murray then went on to dismiss the objections, including those raised from within the Northern Ireland Assembly.

“The government are aware of the analysis undertaken by the Department of Agriculture, Environment and Rural Affairs in relation to the potential impacts in Northern Ireland of the reforms to these reliefs,” he said.

“However, the government remain firmly of the view that claims data is the correct way to understand an inheritance tax liability. The government’s analysis of the number of estates across the UK expected to be affected by reforms is underpinned by that data.”

Mr Murray went on: “The government understand the concerns raised in the petition, but believe our approach gets the balance right between supporting farms and fixing the public finances in a fair way.

“The reforms reduce the inheritance tax advantages available to owners of agricultural and business assets, but still mean those assets will be taxed at a much lower effective rate than most other assets.

“Despite a tough fiscal context, the government will maintain very significant levels of relief from inheritance tax beyond what is available to others and compared with the position before 1992.”

Mr Swan said the response was disappointing and “yet another example of the government not understanding the gravity of their decision to empty the pockets of our farmers”.

He added: “Thousands of farmers from across Northern Ireland and, of course, the wider UK have voiced their concern about the devastating impact that this tax could have on so many of our family farms.

“I will continue to use every parliamentary process available to me to stop this Treasury cash grab, and I thank the Ulster Farmers’ Union for the fight they have continued to put up against this unjust tax.”

The latest study into the proposed tax changes, carried out by finance and mortgage advisory firm Ashbridge Partners, found that 39 per cent of farmers it surveyed expected their farm to be unsustainable within five years, with 56 per cent believing their farms will become financially unviable by 2035.

In addition, one in 10 farms expected to face an inheritance tax bill of over £1 million, with 31 per cent expecting a bill of over £500,000 – with 41 per cent of the belief that they will be forced to sell off at least half their farm business to pay their IHT bill.

The average Farm Business Income (FBI) was £86,000 across all farm types in Great Britain, according to 2022/23 data, with 17 per cent failing to make a positive FBI that year and only 41 per cent making over £50,000.

At the average income level, it would take inheritors 11 to 12 years to pay off an IHT bill of £1 million – more than the government’s 10-year instalment option.

Furthermore, only 40 per cent of farms polled by Ashbridge Partners expect to fall below the proposed tax relief caps – leaving the equivalent of 125,400 UK farms above the threshold – a stark contrast to the government’s estimates of ‘significantly less than 500 estates per year’.

In total, 60 per cent of farmers were worried that their business won’t be financially sustainable in the future if ministers forge ahead with their plans.