Farmers Plan Legal Action Against Rachel Reeves Over Family Farms Tax Controversy

A group of farmers has revealed plans to take Rachel Reeves to court over the controversial Family Farms Tax, arguing that she neglected proper consultation protocols regarding the tax modifications. This legal challenge, initiated by the prominent law firm Collyer Bristow LLP, represents the interests of affected farmers and business owners who believe the government has not fulfilled its statutory consultation duties. They contend that only a limited technical consultation took place, focusing narrowly on a single aspect of the proposed changes, rather than encompassing a broader dialogue that includes the perspectives of those most impacted.

James Austen, a partner at Collyer Bristow, articulated that the core argument is centered around the necessity for the government to comply with its legal obligations concerning tax policy. The lawsuit does not seek to reverse the government's decision related to Agricultural Property Relief (APR) or Business Property Relief (BPR); rather, it emphasizes the need for comprehensive consultations to ensure that policymakers have the most relevant evidence when shaping tax regulations for farms and businesses in the UK.

Victoria Atkins, the environment spokesperson for the Conservatives, has expressed her support for the farmers' position, criticizing Ms. Reeves for her insufficient consultation practices. She has pointed out that this Labour government has repeatedly implemented harmful policies without adequate stakeholder input, including recent changes to APR and BPR that have led to the imposition of the Family Farm Tax and Family Firm Tax. Emphasizing the importance of food security, Atkins urged the government to rely on expert advice and factual data rather than theoretical political ideologies while making decisions that affect the agricultural sector.

Farmers are seizing the opportunity to challenge the government, especially in light of recent policy reversals regarding Winter Fuel cuts and potential changes to welfare cuts. The plan to terminate the exemption of farmland from inheritance tax under APR will now restrict the relief to properties valued at up to £1 million; any value exceeding this threshold will incur a 20% inheritance tax. While the government anticipates that this will generate £250 million annually, independent estimates suggest the actual cost could approach nearly £2 billion, leading to reduced investments and job losses among family businesses. According to research from CBI Economics, these tax changes not only threaten the expected tax revenue but also risk undermining economic growth, as highlighted by Family Business UK, the organization behind the study.