Tractor Tax to Hit 75,000 Farmers – Five Times as Many as Reeves Claims, Expert Says

WILL JONES

Rachel Reeves’s ‘tractor tax’ will hit 2,500 farmers a year, 75,000 over a generation – five times as many as the Chancellor claims because she doesn’t understand the industry, a leading expert has said. The Telegraph has more.

Treasury analysis that claims the Chancellor’s changes to agricultural relief on inheritance tax will affect just 500 farmers each year is “wrong” because it has not properly understood the industry, the Central Association of Agricultural Valuers (CAAV) has said.

The figures have also been analysed by BBC Verify, the broadcaster’s fact-checking service, which has sided with the Treasury while dismissing significantly higher numbers published by the industry.

However, Jeremy Moody the Secretary and Adviser to the CAAV said the measures will in fact hit 2,500 farmers each year, five times the Treasury’s estimates.

He said: “They’re wrong because they’re working on an incomplete picture.”

“What they got wrong is, they didn’t know what to ask and HMRC couldn’t answer them even if they had.”

Over a generation, Mr. Moody said 75,000 farms will be affected by the changes.

Currently, farmers can claim up to 100% relief on inheritance tax on their land and buildings through agricultural property relief (APR) and up to 100% relief on their operational equipment and livestock via business property relief (BPR).

However from April 2026, only the first £1 million of both their land and business combined will qualify for 100% relief through APR and BPR under changes announced by Ms. Reeves last month. Above this threshold, inheritance tax will be charged on their estates at an effective rate of 20%. Estates are normally charged 40% but farmers will continue to benefit from relief on half of that amount.

The Government has been publicising the BBC’s analysis of the Treasury figures, with Sir Keir Starmer telling reporters last week: “All of you can check out what that means in terms of the impact. I think the BBC has already done it.”

While the Government has insisted that this analysis incorporates claims for both BPR and APR combined, Mr. Moody said it has approached the calculation in the wrong way.

The Treasury analysis was based on how many estates claimed APR and then claimed BPR, but this has “completely missed” the people who are farmers but only claim BPR, Mr Moody said.

The Treasury and the BBC’s analysis has therefore missed people who own the land but do not own the farmhouse (such as those in farming partnerships), people who only have tenanted businesses and therefore do not own land or buildings, and farmers who are shareholders in family companies.

Mr. Moody said: “All of these categories come together to produce really quite a serious number of people and some of them are really quite significant claims. A dairy farm with 200 dairy cows will start with £500,000 worth of dairy cattle before anything else.”

Incorporating estimates for all of these people, the number of individual taxpayers who will be affected will in fact be 2,500 per year, Mr. Moody said.

Worth reading in full.

Stop Press: Farmers can marry their mother-in-law to avoid the new tax, it has emerged, as spouses still qualify for 100% tax relief. As long as everyone’s clear where they stand on conjugal rights…

This article (Tractor Tax to Hit 75,000 Farmers – Five Times as Many as Reeves Claims, Expert Says) was published by The Daily Sceptic and is republished here under “Fair Use” with attribution to the author Will Jones