Budget: Income tax "burden" on farmers in West Dorset

One farmer slammed it as "totally unfair" and an agricultural society chairman said it will "destroy" the livelihoods family farms have worked hard to build over the years. 

Chancellor Rachel Reeves announced during her Budget speech that farmers and growers would have to pay 20% inheritance tax on farms worth more than £1million.

James Bowditch, a farmer from Netherbury, recalls the last time they were affected by the inheritance tax which was imposed during the labour government of 1974 to 1979. 

He said: "My grandfather died unexpectedly in 1979 when there was inheritance tax on farmers' land so we were hit financially by that. 

"I'm 47 now and if I die unexpectedly before the acres of land are passed on to my son or daughter they could be stuck in the same situation. It seems totally unfair. 

James Bowditch (Image: Supplied) "It's not a huge problem if you have time to pass it on to your successor to avoid the inheritance tax. For the last twenty years we've not had to worry what would happen if I suddenly passed away.

"But it's one of the most dangerous industries to work in as there are more chances of having a horrible accident due to the farming machinery we use."

Philip Hardwill, chairman of the Melplash Agricultural Society - a charity which support local farmers, said this inheritance tax is an "added burden" to small farms who are already struggling. 

He said: “We're very concerned as the majority of farms in the West Dorset area are small family farms. 

Phillip Hardwill and his wife Sarah (Image: Melplash Agricultural Society) "These people have been working for generations to build their farm up. Now a percentage of it could be given away to HMRC, everything they have worked hard for throughout their lives is suddenly being taken away.

"Returns have also been diminishing over the past number of years and smaller farms are struggling. It's an additional burden - the straw that could break the camel's back.

"As a society we're trying to provide information to our members and putting together a webinar with some of advice from legal advisors about how farmers can plan for succession. 

NFU