Treasury ‘buries’ farming report until after Budget in inheritance tax blow
A government-commissioned review that shows the financial pressures on the farming industry has been “buried” by the Treasury until after the Autumn Budget, Whitehall sources claim.
The review which was carried out by a former president of the National Farmers’ Union (NFU), Baroness Batters, is understood to lay bare concerns among farmers over Chancellor Rachel Reeves’s changes to inheritance tax (IHT) last autumn, the Sunday Times first reported.
From April 2027, UK farmers with assets of over £1m will be subjected to 20 per cent inheritance tax, a decision that has sparked uproar within the industry due to farmland previously having been exempt.
The Batters report, which makes 57 recommendations about how improve the profitability of farming, was submitted to the Department for Environment, Food and Rural Affairs (Defra) at the end of October, and had been excepted to be issued within weeks.
But at a select committee meeting last week, the environment secretary, Emma Reynolds, committed herself to only publishing it before Christmas, just days after Batters told a farming conference that she believed it would be published in “the next couple of weeks.”
IHT not open for debate
Batters was commissioned by Defra in April and asked to submit her report in time for publication for the Autumn Budget.
At the time of commission, then environment secretary, Steve Reed, said he hoped to use the findings to try and secure more support for farmers in the Budget to mitigate tax changes.
But, Whitehall sources claim the report has been “locked away” inside Defra after the Treasury made it clear that it did not want the report to be published until after 26 November.
A government source also said there was no desire in the Treasury to reopen the debate over inheritance tax.
Another source familiar with the process said: “The feeling I got is that they [the government] would quite happily let this die…which equates to delaying it.”
The NFU and Country Land and Business Association have argued that the changes would threaten family farming because small businesses would be forced to sell assets to meet the inheritance tax changes.
HMRC estimated that about 2,000 estates would pay more tax as a result of the inheritance tax changes, but fears are growing that many farming families will instead leave the industry to avoid paying.
Farmers anger
Although Batters was not asked to include explicit recommendations on inheritance tax, sources familiar with her review said it makes clear there is widespread worries in the sector about the impact of the tax.
Speaking in Petersborough earlier this month, Batters said her review would call for a radical overhaul of government policies towards the farming industry, which she argued had been undervalued for too long.
She said “short term wins” could be achieved through tax incentives and investment opportunities, while also backing the creation of a new arm’s-length body, Food and Drink England, which would help to implement agriculture and food policy and simplifying confusing regulations.
Batters declined to comment to The Sunday Times.
Defra said: “The secretary of state is grateful for all the work that Baroness Batters has undertaken.
The Batters profitability review is an important step in our commitment to boosting the long-term profits of farmers and will be published before Christmas.”