Farmers took to the streets in Westminster last week to protest the tax hike (Image: Getty)
Rachel Reeves’s tax raid on farmers will hit five times as many businesses as she has claimed, an agricultural association has warned.
The government said its plan to impose 20% on farms worth more than £1million will affect 500 farms in the 2026-2027 financial year.
But the Central Association of Agricultural Valuers (CAAV) has suggested 2,500 farms could be impacted each year.
Jeremy Moody, author of the report and secretary at the CAAV, said figures had not taken into account farmers who only claim Business Property Relief (BPR).
He said: “The Treasury didn’t look at BPR claims sitting there on their own.
“Unless you’re trying to argue the value of a farmhouse, which these days can be quite high, it’s just convenient to claim BPR on the land and machinery.
“A landowner might place the farm under BPR purely for simplicity because whether you claimed under Agricultural Property Relief (APR) or BPR has never mattered before.
“If a family farm is structured as a company then they also would only claim BPR, which isn’t wrong to do.”
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Rachel Reeves’s tax raid on farmers will hit five times as many businesses as she has claimed (Image: Getty)
The Daily Express has launched the crusade which demands the Chancellor U-turns on the inheritance tax announcements made at last month’s budget.
It has been suggested that the Government could confirm some kind of climbdown on the issue in coming days after 13,000 farmers took to London’s streets to protest against the decision.
Mr Moody said the government figures failed to consider that farms are typically handed down every 30 years, for example from an 85-year-old who dies to their 55-year-old son or daughter.
He added: “The government’s figures accept that the effect from introducing inheritance tax is over 75 years, they didn’t think about how long a generation is.”
A government spokesman said: “Our commitment to our farmers is steadfast – we have committed £5bn to the farming budget over two years, including more money than ever for sustainable food production, and we are developing a 25-year farming roadmap, focusing on how to make the sector more profitable in the decades to come.
“We have been clear since this change was announced that around 500 claims of Agricultural and Business Property Relief each year will be impacted – this is based off actual claims data – and even when inheritance tax does kick in, it is effectively at half the rate paid by others.
“It is not possible to accurately infer inheritance tax liability from farm net worth figures as there are different circumstances affecting each farm, such as who owns it, the nature of ownership, how many people own it and how affairs are planned.”