The UK county where ‘70% of farms’ could be hit by tax - ‘I don't believe Reeves!'

Up to three-quarters of family farms in a UK county are set to be impacted by Rachel Reeves' death tax, an expert has said. David Chugg, the National Farmers Union (NFU) chairman in Devon told the Express that growers are making less than 1% profit, which is not enough in order to pay up. He said: "Regardless if you've got 10 years to pay inheritance tax, the money's not there to do it. Farmers do pay their tax, if they make a profit, they pay the tax. But there's not enough money being generated for that purpose, and to take a wage and revinvest, it's not doable."

Mr Chugg added: "It will end up potentially breaking up a lot of the family farms." When asked how many of these in the county could be affected, the Barnstaple sheep and arable farmer said between 60% and 70%. "Obviously, I don't know every farmer, but what I'm picking up. I've said it before, and I feel like I'm repeating myself so much. There appears to me to be a complete disconnect at the heart of Government on how farming operates, on the lack of profitability.

"And that lack of profitability is not just in the last year or two, that's been years and years going back. Farmers are very proud people, they work the land, they enjoy what they do.

"We're proud of what we produce, we're proud of our standards. We have the best produce and food in the world."

He added: "Farmers are really proud of the landscape. To keep the green hills and all the countryside looking really nice for everyone, the public to enjoy, comes at a cost, and that's solely down to the farmers and landowners, and land managers. That's why that is."

Assets will have to be sold off, the local NFU chief warned.

"On economies of scale, it takes a lot to earn a little. So, if you have to sell on land or buildings, that farm then becomes potential unviable, and that's what my fear and worry is.

"All for a sum of money that runs the NHS for about a day and a half."

The farmer does not recognise the Government's estimates as regards how many farms it thinks will be impacted. Mr Chugg said: "I'm sorry, I just don't believe it."

The secretary of state, Steve Reed, he added, is "still trotting out the same lines", and, considering APR, BPR and IHT, figures cited by ministers "don't stack up".

He did not want to tell the Express how much he thinks he would have to pay in IHT upon his death, as he is "in the throws of working that out now".

But "it is very concerning", Mr Chugg said. "It's really worrying. Myself, I'm over the age of 50 now, my dad passed away six years ago, and since I could walk, all I've done is farm.

"I've chosen to do that, I've chosen to take the career path that I have, because that's what I wanted to do."

Mr Chugg and his wife have five children, the oldest aged 18, and, at the moment, they are "showing no signs of wanting to do it". "What they say is, 'Why would we want to work as hard as you do, for so little?'"

The sustainable farming initiative (SFI) is also an important issue, which paid farmers for sustainable food production.

It was closed to new applications on March 11, but this was later tweaked so that those that started filling out the paperwork after January 11 could resubmit.

Mr Chugg said a new scheme "needs to be now to give farmers time to plan". "Farming is not an industry where you can turn a tap on and off like that," he added. "There seems to be no urgency."

The Chancellor, Rachel Reeves, has previously claimed that up to about 520 inherited agricultural estates a year “will be impacted to some extent by these changes”. Mr Reed has said "three quarters of farmers will pay nothing as a result of the changes”.

A Government spokesperson said: “The vast majority of estates claiming these reliefs will still pay no additional inheritance tax, and those that do will pay a reduced rate and be able to pay over 10 years interest-free. This is a fair and balanced approach to help fix the public services we all rely on.

“We are also investing £5 billion into farming over two years, the largest amount for sustainable food production in our country’s history, and are going further with reforms to boost profits for farmers by backing British produce and reforming planning rules on farms to support food production."