Tesco warns inheritance tax raid on farmers has put Britain's food security at risk

The retail giant has aligned with Sainsbury's, Asda and Morrisons in supporting farmers' opposition to the tax changes.

"With many smaller farms relying on APR (agricultural property relief) and BPR (business property relief) we fully understand their concerns," said Prasad.

Critics claim the move could wipe out family-run farms with tight margins, as they will be forced to sell up in order to pay death duties.

From April 2026, farmers will pay a 20 per cent rate of inheritance tax on land and property they inherit worth more than £1million, as announced by Chancellor Rachel Reeves in her October Budget.

Ministers have insisted the measures will only affect the wealthiest quarter of landowners. However, the National Farmers' Union (NFU) and other groups dispute these claims, arguing the impact will be far more widespread.

Farmers have been staging protests across the UK in response to the changes, including demonstrations at Westminster.

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Analysis by the Country Land and Business Association suggests a typical 200-acre arable farm making £27,300 profit would face an inheritance tax liability of £435,000. The farm would need to allocate 159 per cent of its annual profit to cover the tax bill over ten years.

Mo Metcalf-Fisher, director of external affairs at the Countryside Alliance, said Tesco understands their business "benefits from a buoyant family farming sector, something the Treasury's tax hike threatens to completely undermine...It is becoming almost impossible to find anyone that supports this policy".

A Government spokesman defended the measures, stating their "commitment to farmers remains steadfast" with £5billion committed to the farming budget over two years.

"Our reform to Agricultural and Business Property Relief will mean farmers will pay a reduced inheritance tax rate of 20 per cent, rather than the standard 40 per cent, and payments can be spread over 10 years, interest-free," they said.

In North Yorkshire, leaders of all four major parties have written to Rachel Reeves demanding changes to the inheritance tax policy.

The cross-party letter, led by Tory councillor Carl Les but supported by Labour, Liberal Democrat and Green representatives, marks one of the first acts of defiance from Labour politicians to the Chancellor's Budget.

The Office for Budget Responsibility has estimated the policy will raise just £500m over three years, though it warns this figure is "highly uncertain".

The fiscal watchdog added that revenue could be reduced by farmers passing assets to their children seven years before death.