A report from the Office for Budget Responsibility (OBR) has stated that it is ‘highly uncertain’ that changes to inheritance tax will raise the £500m the Treasury claims.
It added that the changes will likely leave elderly farmers exposed, with no time to manage the new policy.
Responding to the report, NFU president Tom Bradshaw said: “This OBR report confirms what we have repeatedly warned since Budget Day; that it will be older farmers who will be hardest hit by the government’s misguided family farm tax.
“One minute they were advised to keep their farms until death to pass them on to the next generation, the next they’re left knowing that if they live beyond April 2026 when the measures come in, their children may have to break up or sell the farm. What an appalling position to put elderly people in.
“I outlined the terrible human impact on elderly farmers explicitly when I met the Prime Minister, and in a personal letter I wrote to Chancellor Rachel Reeves and again in front of the recent Efra Select Committee. At every stage the government has consistently ignored what we have been telling them about this abhorrent policy. Is it now going to ignore the OBR too?
“And given the OBR says it’s highly uncertain it will raise the expected amount of money either, surely it is time for ministers to accept this policy needs the proper consultation it never had?”
Country Land and Business Association (CLA) president Victoria Vyvyan added: “It is clear that neither the Treasury nor the Office of Budget Responsibility (OBR) has fully considered the impact on the economy of these tax reforms.
“Ministers have repeatedly said that the OBR had certified their claims, but the truth is that the OBR themselves say there is a high degree of uncertainty as to how much money will be raised, if any at all.
“But we do know that farmers and small business owners are pulling investment, cancelling machinery orders and considering whether their businesses are viable for the long-term.
“This means fewer jobs, less food security, less growth and less money going into the Exchequer to pay for public services. Government must put these reforms out to a meaningful consultation, so that Treasury can truly understand the damage they are doing.”