Inheritance tax on farms: Lidl, Tesco and Aldi join demands for consultation
Supermarkets Lidl, Tesco and Aldi have added their names to calls for a consultation over the government’s reforms to inheritance tax, citing concerns the changes would dent farmer confidence and choke off investment.
In an unusual string of interventions, the retailers rode to the defence of farmers’ calls to pause the changes to Agricultural Property Relief announced in October’s Budget, demanding the government seek representations from businesses and farmers before it is introduced.
“We are concerned that the recent changes to the inheritance tax (IHT) will impact grower confidence and hold back the investment needed to build a resilient, productive and sustainable British food system,” Lidl’s UK arm said in a statement.
“We, therefore, support the call by the farming community to pause the implementation of those changes and to consult with industry to achieve a mutually beneficial outcome.”
The German supermarket, which last year both achieved their highest ever market shares in the UK, also pledged to raise its concerns with government at “any opportunity we get”.
Meanwhile Tesco’s chief commercial officer Ashwin Prasad called for more certainty for farmers in a statement on Wednesday supporting a consultation.
“After years of policy change, it has been harder than ever for them to plan ahead or to invest in their farms,” he said.
“With many smaller farms relying on APR and Business Property Relief (BPR), we fully understand their concerns.”
Farmers vs the Government?
The firms’ comments follow months of assiduous campaigning from farmers and rural communities in opposition to the IHT reforms, which have seen high profile protests spill out into the streets of Westminster and across the country.
As part of her maiden Budget, Chancellor Rachel Reeves proposed an end to the carve out on inheritance tax laws known as Agricultural Property Relief (APR).
The clause, introduced by Margaret Thatcher’s Conservative administration, allowed farmers to pass land and other agricultural property down generations without paying IHT, preventing farms from being broken up unnecessarily.
But Reeves opted to do away with the full exemption arguing it was being abused as a way for the wealthy to avoid IHT, and restricted the relief it to the first £1m of estates’ combined agricultural and business property.
The move provoked uproar from many, with farmers and industry bodies warning it would lead to the break up of family farms despite government claims it would only affect the wealthiest 500 estates a year.
Lidl and Tesco’s interventions were followed by German rival Aldi, with a spokesman from the supermarket saying that “British farmers and suppliers are the lifeblood of [its] business”.
They come just days after Asda became the first supermarket to come out against the changes, which are set to come in at the start of the next tax year on April 6.
All four of the supermarkets have signed a letter to the government that is being ring-led the National Farmers’ Union (NFU).
The Treasury was approached for comment.