Family Farm Tax Will Not Achieve Government Intentions

As the draft legislation for the Finance Bill is laid out, the NFU is urging the government to look at its alternative ‘clawback’ solution to the family farm tax to prevent farmers – the food producers of this country – becoming collateral damage from the planned reforms.

The government has outlined plans to hold a technical consultation on the draft legislation, including on inheritance tax, to ensure it ‘works as intended’.

This is a common process in the development of a Finance Bill, but given the appalling consequences of this legislation, the NFU will be holding the government to account on every element of this policy. The NFU has repeatedly provided evidence that the current policy does not achieve the government’s intentions of closing a loophole, protecting family farms, or generating as much revenue as it should. Nor do we agree that it is ‘not expected to have a material impact on food security’.

On the other hand, the NFU’s ‘clawback’ solution would allow the Treasury to raise the revenue it seeks without tearing apart farming families or jeopardising domestic food production.

Prime Minister Sir Keir Starmer has previously said: “If somebody makes powerful representations, then my instinct is to consider what’s being said. Getting it right is more important than ploughing on with a package which doesn’t necessarily achieve the desired outcome.”

The NFU agrees, and they are far from alone.

Since the Budget in November 2024, swathes of MPs from all parties, including members of the government’s own back benches, alongside county councils4, farming and business organisations, the food supply chain and over a quarter of a million members of the British public have joined the call to stop the family farm tax. Even the Office for Budget Responsibility and the government’s own Efra Committee have highlighted the impact these reforms will have on vulnerable elderly farmers.

Throughout the summer, NFU members have also made their voices heard. At county shows across the country, thousands of letters and postcards were collected from farmers and the public to be sent directly to MPs – each sharing personal stories of how this tax will devastate their family farms.

NFU President Tom Bradshaw said: “At the heart of this battle are the elderly farmers who have devoted their entire lives to growing food for the country and supporting their rural communities. They should not become collateral damage. To see them face such uncertainty, knowing the legacy they and their families have worked hard for and grown could be ripped away by this tax, is heartbreaking. I cannot begin to imagine the fear many must be feeling right now – their homes, their livelihoods and everything they’ve worked for is under threat."

“I have spoken directly to the Prime Minister and Treasury Exchequer Secretary James Murray about the disastrous impact of this tax. Yet, despite our persistent efforts, Chancellor Rachel Reeves still refuses to meet us to discuss our alternative ‘clawback’ proposal. The Treasury claims our solution will raise less revenue, but is refusing to release the modelling on how it came to this conclusion."

“I echo the Prime Minister’s own words: getting this right is more important than pushing ahead with a policy that does not achieve its intentions."

“Farmers, supermarkets, councils, MPs across the political spectrum and the wider public have all voiced their concerns about this tax. This issue goes far beyond farming. The food and farming sector supports millions of jobs, fuels our domestic food supply and contributes billions to the UK economy. When you undermine farm businesses, you undermine a vital part of our national infrastructure. If this legislation goes ahead, it will unquestionably have devastating and irreversible impacts on the country and it is so poorly designed that it will inevitably have to be changed in the future."

“I want to thank every one of our members who took the time to write postcards and letters to their MPs over the summer – your voices are vital. We continue to urge all farmers and the public to make their representations directly to their MPs to show first-hand the impact of this damaging tax."

“The Prime Minister must now take his own advice and listen to the overwhelming evidence that the current policy will not work as intended. To ignore the consequences this tax will bring would be a betrayal of the very people who feed our nation. We cannot stand by and watch the backbone of the countryside be broken when there is a credible alternative being offered."

“This is a moment that demands listening, compassion and action. The government needs to sit down with farming representatives to find a solution that protects the future of our domestic food production – before it is too late.”