The 2024 spring budget has not offered enough stability for agricultural businesses, according to the National Farmers’ Union (NFU).
Chancellor of the Exchequer, Jeremy Hunt, delivered his spring budget on Wednesday, March 6, and announced an extension to the existing scope of Agricultural Property Relief (APR).
The union welcomed the extension of APR to land in Environmental Land Management (ELM) schemes, but said that Hunt’s budget “doesn’t go far enough” for food production.
NFU president Tom Bradshaw said: “Where some of the headline announcements, such as an extension to agricultural property relief (APR) and a reduction of national insurance for the self-employed, could offer some benefits to agricultural businesses, the chancellor has missed an opportunity to deliver resilience for food producers.
“We welcome the government backing the NFU’s call for the extension of APR to land in Environmental Land Management (ELM) schemes as it will remove a barrier of entry for a number of farm businesses and give farmers more choice about how to use their land.
“But the extension of this beyond ELMs may have an adverse impact on food production and farm tenancies and we will work with Treasury to assess those implications.”
Bradshaw said agricultural businesses are facing a “challenging” economic backdrop, with input costs at “persistently high levels” and at least a 50% reduction in direct farm payment support due this year.
Agricultural Property Relief
The changes to APR will include all environmental land management schemes, covering the Sustainable Farming Incentive, Countryside Stewardship (and other stewardship schemes) and Landscape Recovery, as well as the England Woodland Creation Offer and other similar schemes from April 6, 2025.
The extension also applies to the rest of the UK, benefiting all British farmers.
The change means that farmers and landowners taking part in such schemes will be eligible for APR and exempt from relevant inheritance tax.
Land managed under an environmental agreement with, or on behalf of, the UK government, Devolved Administrations, public bodies, local authorities, or approved responsible bodies will all be in scope for APR.
It also removes a barrier to tenant farmers and landlords collaborating to enter schemes by removing the risk that tenants’ participation in schemes would change whether the land is eligible for Agricultural Property Relief.
