Tuesday saw thousands of furious farmers descend on Westminster to protest changes to the inheritance tax paid on farms.
There’s since been talk of strikes – and even the possibility of empty shelves – if the government refuse to U-turn on changes to inheritance tax announced in the recent Budget .
Chancellor Rachel Reeves announced tax breaks for farmland worth over £1million will be closed. But she said a string of protections for spouses and children of farmers who die mean the threshold will be three times this sum in most cases.
Speaking on The Division Bell podcast, The Mirror ’s Mikey Smith said the changes will only impact a small group of people.
He said: “A tiny handful of these people are ever going to pay inheritance tax on their farms, regardless of what people’s accountants say.”
“And let’s not forget, people’s accountants are never going to be proven wrong until their clients are no longer with us….and the taxman is saying, no, it’s not going to it’s going to affect a handful of people.”
“This [change] is aimed at people who are exceptionally wealthy and have historically avoided inheritance tax by ploughing a lemon into farms and getting relief…They’re not farmers. They’re just rich people.”
Labour has repeatedly claimed that only the wealthiest 500 estates each year will be affected.
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They say the new policy will bring £520 million into the economy and will plug the £22 billion ‘black hole’ the Tories left behind.
With the addition of other allowances, the government say that in reality people will be able to pass on as much as £3 million without paying inheritance tax.
Mikey said: “You would have to pass on 3 million worth of assets, including your farm, before you pay a penny [of inheritance tax], which seems like quite a lot to me.”
“And I imagine it seems like quite a lot to most people. You’ve got to remember, a lot of people in this country don’t have any assets, don’t have houses, don’t have cars.”
“It’s a really tough sell when these people pay their taxes as they should, don’t have the opportunity to avoid taxation… And on top of that they’re still, through their taxes, subsidising the farming sector, which they have been for decades.”
“ I would be absolutely amazed if more than a handful of farmers had to sell off even a field.”
Under the Chancellor’s plans the changes will only apply to farms worth more than £1million (£3million if owned by a couple) and even then the tax will be charged at a reduced rate of 20%.
Treasury figures show that 1,730 farms were passed on in 2021-22 of which 1,264 were worth less than £1million. These figures suggest that only a small portion of farms will actually be impacted.
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However, the National Farmers Union and the Country Land and Business Association says that up to 70,000 farms could still be impacted by the changes.
President Tom Bradshaw told Sky News on Tuesday: “There’s always been an understanding, a contract, between farming and society, farming and the government, ever since the Second World War, and this Labour Government has just destroyed that contract with the changes they proposed to the inheritance tax.”