‘Huge missed opportunity’ – Industry responds to Budget announcement
27th November 2025
Farming industry leaders have criticised the Autumn Budget announcement, calling it a “limited change to a damaging and destructive tax”.
Since changes to Agricultural Property Relief and Business Property Relief were first announced, there has been mounting opposition to this family farm tax.
More than 275,000 members of the public have called on the government to make changes; trade associations representing 160,000 family businesses wrote to the chancellor calling for reform to the policy; MPs from across the political divide have told Rachel Reeves about the impact it will have on the rural communities they represent; and independent tax experts have suggested changes to make it more targeted.
During yesterday’s Budget, the Chancellor announced only a small change to the inheritance tax rules, which will allow those farmers who are married, or have deceased spouses, to transfer their inheritance tax allowance to one another if one of them dies having not used their allowance.
NFU president Tom Bradshaw said: “It’s good to see the government accepts its original proposals were flawed. But this change goes nowhere near far enough to remove the devastating impact of the policy on farming communities.
“It is also a huge smack in the face to the Labour MPs who have been working so hard to find a way through this for their local farmers. To them, we say thank you.
“The chancellor said she wanted to ‘back working people, not make them poorer’ and to ‘increase investment, not cut it’. To do that, government must look again at the multiple solutions that have been put forward by industry and tax experts.”
Mr Bradshaw added that yesterday’s “minimal movement” on the family farm tax comes alongside a range of other announcements in the Budget that could increase inflationary pressures on our food system.
He continued: “Several other announcements in the Budget will hit farming and growing businesses hard. The increase in the national living wage, which will have risen 12% in two years, puts further cost pressures on agricultural and horticulture businesses and further inflationary pressures on our food system. At a time when the government has an ambition to get the country eating more fruit and vegetables, it will hit the horticulture sector hardest.
“The increase in the autonomous tariff quota (ATQ) for sugar cane undercuts British growers at a time when this government says promoting growth and investment at home is its priority.
“However, we believe farming may benefit from the announcements on apprenticeships, and it could help bring the next generation into our food and farming sector. “
READ MORE: Budget 2025: Change to IHT announced
‘Mistakes have been made’
NFU Cymru has described the Budget announcement on inheritance tax as a “limited change to a damaging and destructive tax”.
NFU Cymru president Aled Jones said: “I acknowledge the change announced yesterday will help a limited number of farmers, but it does not mitigate the devastating impact of this policy for many.
“In making this change the UK government is essentially recognising that mistakes have been made in the way in which this policy was designed. I welcome the fact that they appear to be acknowledging these errors, but the step they are taking does not go nearly far enough to reduce the damage that this policy will do to Wales’ family farms, our rural communities, Welsh language and culture.”
Mr Jones added that over the last 12months or so some “truly heart-breaking” accounts have been shared with him of elderly farmers or those diagnosed with terminal illnesses who have in good faith arranged their affairs on the basis that their estates would not be subject to inheritance tax.
“These farmers now find themselves caught in the crosshairs of this policy with no time left for them to make alternative succession arrangements. This acute impact on the elderly and terminally ill remains a huge concern, and for them, in particular, we keep fighting,” he continued.
‘Huge missed opportunity’
The Nature Friendly Farming Network (NFFN) said that the Autumn Budget 2025 has failed to grasp a huge opportunity to invest in the UK’s farmed landscape, an investment that is essential both for growing the economy and protecting communities from climate change.
Chancellor Rachel Reeves set out the government’s tax and spending priorities for the year ahead on Wednesday 26th November, yet farming barely featured in her speech.
The NFFN said that the government has overlooked the countryside and the wider rural economy in its attempts to drive growth and reduce the cost of living, despite the enormous potential for farms to deliver economic resilience and environmental benefits with the right long-term support.
With farming reeling from the escalating impact of climate change, including floods, heatwaves and droughts, and millions unable to afford essential foods, Britain urgently needs a comprehensive package of measures to secure the future of food, farming and nature, the union said.
NFFN CEO Martin Lines added: “The Budget represents a huge missed opportunity to recognise the enormous value our farmed landscape can deliver for the economy. A well-supported, nature-friendly farming system provides multiple benefits for our society, yet the government has almost completely overlooked the role of our countryside and rural economy in driving growth and resilience.
“We simply have to invest in our landscapes. Nature-friendly farming and land management can deliver huge cost savings for the government, whether that’s through renewable energy projects, nature-based flood mitigation systems or carbon storage.
“At the same time, farming with a focus on soil health, nature and clean air and water is vital for food security and controlling the cost of living. The impact of climate change on harvests, food production and prices is already visible on supermarket shelves.
“Farmers need ambitious, long-term investment from both the private and public sector, making the government’s continued blind spot towards the industry all the more alarming.”
The NFFN added it was “deeply regrettable” that, at a time when the escalating impacts of climate change on farms should be sharpening the focus on a transition to nature-friendly approaches, many farmers have instead been forced to divert their attention towards financial resilience and succession planning due to inheritance tax pressures.
Farmers seeking to adopt more nature-friendly practices have also been held back by demand for Environmental Land Management scheme (ELMs) support far exceeding the funding available, leaving thousands unable to access the public payments intended to support this transition.
The NFFN is now calling on the government to deliver an ambitious and balanced system of payments, stronger support for smaller farm businesses, and a fair transition to nature-friendly farming – including reform of supply chains and trade deals to ensure UK farmers are not undercut by lower-standard imports.
‘The country is paying the price’
In response to yesterday’s announcement that the £1 million allowance before inheritance tax can now be transferred between spouses, effectively doubling the allowance for married couples, CLA president Gavin Lane said: “This concession is the first public signal that the chancellor knows her inheritance tax reforms have been a disaster.
“Across the country, family businesses have been reducing their investment, at an enormous cost to the economy and the British public. It is not too late for her to scrap the entire policy and finally recognise the enormous value family-owned businesses bring to the UK.
“The chancellor said this was a Budget for sustainable long-term growth. But it is difficult to understand what measures contained within it were designed for that purpose. Government policy continues to disincentivise investment, and the country is paying the price.”
Nick Watson, head of private client at Strutt & Parker, added: “Farmer confidence is at historically low levels, and there will be widespread dismay, although perhaps not surprise, that the government has chosen to stick to a policy which has generated significant concern over the past 12 months.
“Farm and estate businesses must use the next few months wisely, working with valuers, legal advisors and accountants to make changes to their tax and succession plans which reduce this increased liability, without tying their hands for the future.
“Our message to farmers and landowners is that there is still time to act and there are options open to you. However, professional advice is essential, as every business is different and it is important not to take decisions today that could prove to have negative consequences in the future.”
READ MORE: What did Rachel Reeves announce in the 2025 Budget?
‘Not a great Budget for farming’
Mark Charter, head of estate management at Carter Jonas, explained that there is little in this Budget to fundamentally change the outlook of farm and estate owners, with the major changes to inheritance tax (IHT) announced a little over a year ago.
He continued: “Businesses and families who haven’t discussed the future of their assets need to take advice and make decisions quickly.
“The 2% increase in tax on rental income – which will affect rural landlords – is another blow for the rental market. We are already anticipating a rise in costs due to compliance with Minimum Energy Efficiency Standards (MEES). Plus, there is increased risk from the Renters Reform Act, which is hitting confidence in the sector. While the rise seems small, it will further erode the profitability on farms and estates where let property is an income stream.
“An annual levy on residential properties with a value exceeding £2 million will catch some farmhouses and family homes on estates. Questions remain over how properties will be valued and how the tax will be implemented.
“Diversified businesses running retail, hospitality and leisure operations will view the lower business rate multiplier as a positive move. It is a small step,but is a financial gain for those who have diversified because other farming enterprises were not sufficiently profitable.”
Richard Gadd, head of Rural Agency at Fisher German, concluded: “The so-called ‘mansion tax’ announced in the Budget is linked to council tax banding, which means farms with a house worth less than £2 million but with additional land that pushes the overall property above this value should not be affected by it.
“With no changes to inheritance tax or capital gains tax announced by the chancellor, there has been little direct impact on the rural property market bar increases to national minimum wage potentially affecting farm expenditure.
“While this is not a great Budget for farming, especially given the lack of reversal of last year’s changes to inheritance tax relief for farmers, it has been better than some may have previously thought.”
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