Britain has been hit by a “sobering” reality as thousands of farms have been shut down for good ahead of Rachel Reeves’s inheritance tax raid.
According to an analysis of Office for National Statistics (ONS) data by Cynergy Bank, almost double the amount of agricultural businesses are closing as are opening.
In the last few months of 2024, 1,370 businesses in fishing, agriculture and forestry shut down for good.
Meanwhile, only 670 new companies were started.
This comes as farmers have been protesting for the past few months against a new policy regarding inheritance tax
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In the past three years, a shocking number of 16,905 farming businesses have closed, and 9,055 have opened, leaving a net loss of 7,850 companies.
Chief Executive Nick Fahy of Cynergy Bank called this “a sobering picture of the UK business environment”.
He said: “The farming sector is worst hit. With only half of closing agricultural businesses being replaced, farmers are grappling with rising costs, labour shortages and the looming spectre of inheritance tax changes set to take effect in April.”
“In stark contrast, sectors such as healthcare, real estate and education are thriving. These sectors highlight the potential for resilience and adaptation within the UK economy, even as agriculture faces significant headwinds,” he added.
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This comes as farmers have been protesting for the past few months against a new policy regarding inheritance tax, announced by the Chancellor in her October Budget.
At the moment, farmers benefit from agricultural property relief, which means family farms do not experience inheritance tax.
However, come April, the relief will be cut back, with inheritance tax imposed at a rate of 20 per cent above a £1million threshold, taking it halfway to the usual rate of 40 per cent.
In combination with changes to business property relief, Reeves has said she hopes this will raise around £500m per year.
Reeves has said she hopes this will raise around £500m per year
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Tom Bradshaw, the president of the National Farmers’ Union, said the data “underscored the severe challenges facing the UK agricultural sector”.
He claimed the burden of the family farm tax was intensifying the challenges farmers are facing due to an “increasingly volatile environment, exacerbated by fluctuating commodity prices, persisting cost pressures and unpredictable extreme weather”.
“In my recent meeting with the Treasury, it was evident that our concerns about the tax went unheard. The Government must recognise that its stance is not only detrimental to farmers, but undermines food security for the entire nation,” he added.
A spokesman for the Government said the reduction in agricultural property relief was “a fair and balanced approach which helps fix the public services we all rely on”.
The spokesman added that the Government recognised that “food security is national security”, adding that they were investing £5billion into farming over the next two years.
