Thousands of British farmers protest against ‘tractor tax’ on inheritance

By Sarah Young

LONDON (Reuters) -Thousands of farmers protested at Britain’s parliament on Tuesday, some driving tractors through central London, to demand the scrapping of an inheritance tax that they say will destroy family farms and threaten food production.

The measure, dubbed the tractor tax by critics and announced in the new government’s budget last month as it sought to raise funds, has drawn an angry backlash from farmers who say the ruling Labour Party does not understand rural communities.

The protesters held placards stating “no farmers, no food, no future” and “Starmer the farmer harmer”, in reference to Prime Minister Keir Starmer. Police estimated about 10,000 protesters took part.

Farmer Emma Robinson, 44, said she was “absolutely livid” and would take part in measures to disrupt food supplies if the government did not back down.

Robinson said her farm in northwest England had been in her family for 500 years and she was going to pass it on to her children.

“It’s being taken out of my hands by someone that’s been in parliament for literally days,” she said.

The passing of farms down through generations was tax-free, but under the policy set out by finance minister Rachel Reeves, from 2026, 20% tax would be paid on the value of a farm above 1 million pounds.

Existing personal allowances, which a married couple can combine, takes the threshold for a farm and associated property up to 3 million pounds.

Farmers say that while their land and machinery has a high value, the farms themselves have low profit margins, meaning their children would have to sell land to cover the tax bill.

Jeremy Clarkson, the former Top Gear presenter who owns a farm, was among those demonstrating and said his message for government was: “Please back down”.

The government has said the reforms would only target the most valuable farms while helping fund public services that farming communities rely on.

Environment Minister Steve Reed said he did not expect the majority of farmers to pay any more, adding: “There are a lot of figures flying around that I do not recognise.”

The government said the tax change would affect about 500 farms a year, based on the number of inherited farms in 2021-22, with the tax rate payable in instalments over 10 years. But farmers say the numbers affected will be much higher.

The government’s 500 figure does not include assets like livestock and tractors, they said. The Country Land and Business Association has estimated that 70,000 farms are worth more than 1 million pounds, and could be affected.

The backlash is only one part of a wider opposition to the Labour government’s first budget since it won an election in July, with businesses warning Reeves’ other tax-raising measures will fuel inflation.

Farmers say they are already suffering from unfair competition as cheaper imported produce does not have to meet the same environmental and welfare standards, while their incomes have also been squeezed by supermarkets and hit by climate change.

($1 = 0.7923 pounds)

(Reporting by Sarah Young, Sachin Ravikumar and Paul Sandle; Editing by Andrew Heavens, Alison Williams, Angus MacSwan, Alexandra Hudson)