Hundreds of farm retail establishments may be compelled to shut down as proprietors report feeling the effects of the budget.
The Farm Retail Association (FRA) cautions that as many as 700 could close their doors within the next ten years, while farmers persist in grappling with the government.
This struggle entails contending with the increase in employers’ National Insurance, along with the discontinuation of inheritance tax reliefs for farms valued over £1 million starting in 2026.
In response, the FRA warns that farm shops are experiencing pressure from both sides due to the budget.
However, the government has reaffirmed its dedication to farmers and their interests remains ‘unwavering’.
Emma Mosey, chair of the FRA and owner of Minskip Farm Shop, informed The Telegraph: ‘We’re confronted with inheritance tax alterations, which will essentially require us to sell off 20% of assets every generation to cover those additional taxes.
‘Moreover, we also face operational challenges, as employing individuals in stores will incur higher costs.’
The potential closure of up to 700 stores translates to job losses for staff working in farm shops across the UK.
The British Retail Consortium has indicated that the budget has added £7 billion to the expenses of retailers.
Sean McCann, a chartered financial consultant at NFU Mutual, remarked: ‘Due to the £1 million cap on agricultural property and business property relief, numerous farming families will confront significant tax obligations, jeopardizing many farm shops.’
For a great number of farmers, he explained, they have ‘diversified to boost profitability, and farm shops are a prevalent means of achieving that.’
Yet Chancellor Rachel Reeves steadfastly supports her budget, which she anticipates will foster ‘growth’ for the UK.
A government representative stated: ‘Our dedication to farmers remains strong – we have allocated £5 billion to the agricultural budget over two years, including unprecedented funds for sustainable food production, and we are creating a 25-year farming roadmap aimed at enhancing the sector’s profitability in the years to come.
‘Our reforms pertaining to Agricultural and Business Property Reliefs will ensure estates will incur a reduced effective inheritance tax rate of 20%, instead of the standard 40%, and payments may be distributed over ten years, interest-free.
‘This approach is equitable and well-calibrated, addressing the public services we all depend on, impacting around 500 estates next year.’
Numerous farmers have expressed dissatisfaction with the announcement, leading to various protests after the budget was revealed.
Farmers, alongside their tractors, descended upon London in December to voice their grievances against the alterations to inheritance tax.
Approximately 1,800 members of the National Farmers’ Union (NFU) – triple the number initially anticipated, also participated in a protest in the city in November.
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