The Real Cost of the Tractor Tax .

The latest budget, unveiled by Keir Starmer and the Labour government, has introduced a so-called "Tractor Tax" a move that threatens the very survival of British farming as we know it. 

This is not just a tax on the wealthy, as Labour might suggest. It is a targeted blow to the heart of rural communities, with devastating consequences for food producers and the future of British agriculture. Changes to Agricultural Property Relief (APR) and Business Property Relief (BPR) could mean the loss of up to 20,000 farms over the next generation. These farms, vital for producing our food, risk being sold off, not to fellow farmers, but to corporate giants who view farmland as a mere asset rather than a legacy. 

What Does This Mean for Farmers? 

The new measures cap inheritance tax relief on agricultural and business assets at £1 million, with assets above that threshold taxed at an effective rate of 20%. This move disproportionately impacts farms, which often hold high asset values but operate on razor-thin margins. The CLA estimates “A "typical" 200-acre arable farm owned by an individual, with an expected annual profit of £27,300, could face an inheritance tax bill of £435,000. If this amount were spread over a decade, the farm would need to allocate 159% of its profit each year to cover the tax bill. As a result, successors could be compelled to sell off 20% of their land”, undermining both the viability of their business and the sustainability of food production. 

For many family farms, this could mean the end of a legacy passed down through generations, forcing them to sell to corporate interests that prioritise profit over community and sustainability. 

A Threat to Food Security 

This is not just a rural issue; it is a national one. The National Farmers Union (NFU) estimates that 75% of UK food production could be impacted by these changes. With the cost-of-living crisis already straining households, the last thing Britain needs is increased food prices due to policies that destabilise domestic food production. 

A Betrayal of Trust 

Farmers have been repeatedly reassured by Labour that inheritance tax reliefs would remain untouched. The sudden reversal of this promise has left many feeling betrayed. As CLA President Victoria Vyvyan states, “Labour’s decision to rip the rug from under farmers is nothing short of a betrayal... jeopardising the future of rural businesses and food security.” 

Why This Matters to All of Us 

British farms are more than businesses; they are the custodians of our countryside, our food supply, and a way of life that has defined our nation for centuries. At S. Thorogood & Sons, we work closely with countless British farmers who are already stretched to breaking point after years of tightening margins, cost inflation, and extreme weather. For many, this new tax could be the final straw. 

A Call to Action 

The future of British farming and by extension, our food security, rests on all of us standing up against these damaging policies. We urge everyone who values British farming to join the growing movement to oppose the Tractor Tax. Write to your MP, speak out, and support local farmers wherever you can. 

Together, we can ensure that British farms remain at the heart of our communities for generations to come. 

S. Thorogood & Sons 

Fighting for Farmers Since 1922.