A united front of British supermarkets has emerged in support of farmers protesting against the government’s planned inheritance tax reforms. Tesco, Aldi, Lidl, the Co-op, Morrisons, Sainsbury’s, and Asda have all voiced their opposition to the proposed changes, joining calls for a pause and consultation on the policy, which many fear will have far-reaching consequences for the agricultural sector.  

 

 

The government’s plan, set to take effect in April next year, introduces a 20 percent inheritance tax on agricultural and business assets exceeding £1 million. Farmers argue that this policy will impact approximately 75 percent of commercial farms, potentially forcing many to sell their land and threatening the viability of family-owned farming businesses.  

 

Ashwin Prasad, Tesco’s chief commercial officer, emphasized the urgency of addressing farmers’ concerns, stating, “The UK’s future food security is at stake.” He urged the government to pause the implementation of the reforms and conduct a full consultation, calling for a long-term vision for UK agriculture that enables farmers to invest confidently while contributing to the nation’s transition to net-zero emissions.  

 

Lidl shared similar concerns, warning that the changes could undermine farmer confidence and deter investment in building a resilient and sustainable British food system. Aldi, which signed a National Farmers’ Union (NFU) letter urging the government to reconsider, stressed the importance of fostering a farming sector capable of investing in its future and delivering high-quality British food.  

 

Protests have been escalating, with farmers parking tractors in supermarket car parks to draw attention to the issue. Sainsbury’s, Morrisons, and Asda have also expressed public support for farmers, urging the government to listen to their concerns. In an earlier statement, Morrisons reassured farmers, saying, “We’re with you,” while Asda offered similar backing.  

 

The debate gained further traction with the release of a report by the Office for Budget Responsibility (OBR). The report cast doubt on the government’s revenue projections, stating it was “highly uncertain” how much money the tax changes would generate. The OBR suggested that tax planning strategies, such as utilizing other reliefs, increasing charitable donations, or depleting estate values, could significantly reduce the policy’s impact. It also warned that the changes might not yield consistent revenue for at least 20 years.  

 

The government has estimated that the reforms could raise £500 million annually by 2029-30. However, the Country Land and Business Association (CLA), which represents landowners and rural businesses, has challenged this projection. CLA president Victoria Vyvyan argued that the economic implications of the policy had not been fully considered. “It is clear that neither the Treasury nor the Office for Budget Responsibility has fully considered the impact on the economy of these tax reforms,” she said.  

 

Vyvyan pointed to broader consequences, including reduced investment, job losses, and threats to food security. She urged the government to engage in meaningful consultation to understand the potential damage. “This means fewer jobs, less food security, less growth, and less money going into the Exchequer to pay for public services,” she warned.  

 

The CLA’s analysis suggests that over a generation, the reforms could affect as many as 70,000 farms, with at least 500 farms a year potentially facing significant inheritance tax bills. Even at the government’s lower estimate, more than 20,000 farms could be impacted over 40 years.  

 

Environment Secretary Steve Reed has defended the reforms, citing validation from the Institute for Fiscal Studies (IFS) and the OBR. However, the IFS has recommended revising aspects of the policy to prevent family farms from being split up, acknowledging concerns raised by farmers and landowners.  

 

As the debate continues, the solidarity between supermarkets and farmers underscores the urgent need for a balanced approach that addresses the concerns of all stakeholders while safeguarding the future of British agriculture.

 

Based on a report by BBC 2025-01-24

 

 

There’s a very simple fix to this.

 

Apply exactly the same level of IHT as across all other assets within inherited estates, but only collect the tax on inherited farms/farmland if they are sold or otherwise exchanged for value.

 
This would enable real farmers to maintain their businesses free of the IHT while closing the tax break loophole being used by non farming investors to avoid IHT.