Image: Paul Tompkins raises a herd of 400 dairy cows
Chancellor Rachel Reeves announced that, although there will continue to be no inheritance tax on combined business and agricultural assets worth less than £1m, for anything valued above that there would be a 50% relief, at an effective rate of 20%, from April 2026.
The National Farmers Union says the decision could result in farmers having to either borrow money or sell off parcels of land to pay the tax.
Paul Tompkins raises a herd of 400 dairy cows on a 300 acre (4.7 square mile) farm near York.
He, and thousands like him, fear that the new £1m limit on inheritance tax relief on farmland will rob his children of their farming legacy.
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“I thought this budget was going to help working people, and I see myself and other small farmers to be among those working people,” he says.
“I shouldn’t have to be worried that I’m going to be fleeced by the government and have to face the fact my kids might not be able to keep this farm, which has been handed down through four generations, going in the future.”
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‘Raising taxes was not an easy decision’
Shadow secretary of state for rural affairs Steve Barclay posted on X that Labour had “broken a clear promise they made to our farmers”.
The government says only a small number of the largest estates will be affected, and some financial experts agree.
Paul Johnson, Director of the Institute for Fiscal Studies (IFS), says: “What the budget did was reduce the amount of additional relief that farmers get on agricultural land.
“It still means they’ll be significantly more generously treated than the rest of us and still more generously treated actually, than farms used to be in decades past.
“The changes will affect actually a remarkably small number of some of the most valuable farms. The majority will still not be affected by this.”
But the Country Land and Business Association believes up to 70,000 farms could be affected. There are about 209,000 farm holdings in the UK, according to the government.
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The government has confirmed it would be maintaining the £2.4bn farming budget for England in 2025/26, and says its commitment to farmers remains “steadfast”.
But farmers like Paul Tompkins still feel betrayed by the chancellor and maintain that the only fair thing for her to do is to completely reverse her decision.
Emmanuel Macron has said the UK and France have a “shared responsibility” to tackle the “burden” of illegal migration, as he urged co-operation between London and Paris ahead of a crunch summit later this week.
Addressing parliament in the Palace of Westminster on Tuesday, the French president said the UK-France summit would bring “cooperation and tangible results” regarding the small boats crisis in the Channel.
Image: King Charles III at the State Banquet for President of France Emmanuel Macron. Pic: PA
Mr Macron – who is the first European leader to make a state visit to the UK since Brexit – told the audience that while migrants’ “hope for a better life elsewhere is legitimate”, “we cannot allow our countries’ rules for taking in people to be flouted and criminal networks to cynically exploit the hopes of so many individuals with so little respect for human life”.
“France and the UK have a shared responsibility to address irregular migration with humanity, solidarity and fairness,” he added.
Looking ahead to the UK-France summit on Thursday, he promised the “best ever cooperation” between France and the UK “to fix today what is a burden for our two countries”.
Sir Keir Starmer will hope to reach a deal with his French counterpart on a “one in, one out” migrant returns deal at the key summit on Thursday.
King Charles also addressed the delegations at a state banquet in Windsor Castle on Tuesday evening, saying the summit would “deepen our alliance and broaden our partnerships still further”.
Image: King Charles speaking at state banquet welcoming Macron.
Sitting next to President Macron, the monarch said: “Our armed forces will cooperate even more closely across the world, including to support Ukraine as we join together in leading a coalition of the willing in defence of liberty and freedom from oppression. In other words, in defence of our shared values.”
In April, British officials confirmed a pilot scheme was being considered to deport migrants who cross the English Channel in exchange for the UK accepting asylum seekers in France with legitimate claims.
The two countries have engaged in talks about a one-for-one swap, enabling undocumented asylum seekers who have reached the UK by small boat to be returned to France.
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Britain would then receive migrants from France who would have a right to be in the UK, like those who already have family settled here.
The small boats crisis is a pressing issue for the prime minister, given that more than 20,000 migrants crossed the English Channel to the UK in the first six months of this year – a rise of almost 50% on the number crossing in 2024.
Image: President Macron greets Commons Speaker Sir Lindsay Hoyle at his address to parliament in Westminster.
Elsewhere in his speech, the French president addressed Brexit, and said the UK could not “stay on the sidelines” despite its departure from the European Union.
He said European countries had to break away from economic dependence on the US and China.
“Our two countries are among the oldest sovereign nations in Europe, and sovereignty means a lot to both of us, and everything I referred to was about sovereignty, deciding for ourselves, choosing our technologies, our economy, deciding our diplomacy, and deciding the content we want to share and the ideas we want to share, and the controversies we want to share.
“Even though it is not part of the European Union, the United Kingdom cannot stay on the sidelines because defence and security, competitiveness, democracy – the very core of our identity – are connected across Europe as a continent.”