THE warnings about Labour’s tax raid on family farms are worrying.
Farms passed down through the generations will need to be broken up in order to pay, the National Farmers’ Union (NFU) has warned.
One farmer, according to a report in The Telegraph, has even taken his own life, so worried was he about the impact of suddenly having to pay inheritance tax.
Labour insist the new tax burden will affect very few farms and is a reasonable cost to shoulder given the state of the public finances.
So are farmers at it – or are Labour twisting the knife into the people keeping the country fed?
Farmers are an easy target
Firstly, the politics are important here. Farmers don’t vote for the Labour Party. They vote for the Conservatives, the LibDems, some vote for the SNP and others may even vote Reform but they do not, as a rule, vote Labour.
They are an easy target for Labour politically. And because Labour are taxing their assets, rather than their income, they can say they’ve stuck to their manifesto pledge not to raise taxes on “working people”.
The money
Strictly speaking, the “average” Scottish farm does stand to fall under the scope of Labour’s new regime.
The average worth of a farm in Scotland was £1.8 million in the last financial year, up from £1.7m the year before, according to Scottish Government statistics.
On those figures, the inheritors of our “average farm” would need to pay inheritance tax on £800,000 of their farm’s worth – because the first £1m remains tax-free.
Some farmers won't have the money to pay for that.
John Charlesworth so feared reports of a raid on farms, he took his own life the morning of the Budget because there was "no cash and there’s no way of borrowing cash because we don’t have the income" to cover inheritance tax, his son Johnathan told The Telegraph.
But that’s not the whole picture. Farmers earn more than double the average worker in Scotland.
The typical farmer stands to make £69,100 in profit on their farm – with support payments – compared with a gross median salary of £27,710 for your average Scottish worker.
Additionally, farmers don’t just earn money from rearing animals and harvesting crops.
Farmers earned an average of £14,000 from “off-farm” activities, according to the Scottish Government.
And the Treasury says the impact will be felt by vanishingly small numbers.
Three-quarters of farms benefitting from the inheritance tax exemption – agricultural property relief – will continue to do so, according to official estimates. That means only around 500 farms will need to pay the new rate, the Treasury reckons.
Will Labour stick to their guns?
Aside from the tragic story referred to earlier, the impact of Labour’s policy remains to be seen.
The NFU has warned its members feel “militant” over the changes – and they could throw their weight around if they decided to adopt industrial tactics.
Until that admittedly unlikely event, the NFU Scotland will protest in Holyrood to “to send a clear message to the Scottish Parliament” about the need for a more predictable agricultural funding settlement on November 28.
The union will also send down a delegation to Westminster for a bigger protest on November 19.
NFU Scotland president Martin Kennedy warned: “Let us be under no illusions this is a monumental time for Scottish agriculture and we must rally and deliver for all impacted by these reckless decisions being taken by those who do not realise the full consequences of their actions.”
Do you need mental health help? Numbers to call
Samaritans, available 24 hours a day, 365 days a year: samaritans.org. If you need a response immediately, it’s best to call on the phone (this number is FREE to call): 116 123
MIND, the mental health charity: mind.org.uk 0300 123 3393
Rethink Mental Illness: rethink.org 0300 5000 927
