Tax expert used by BBC Verify to back its analysis of the inheritance tax row with farmers now says Labour’s policy needs to change_Nhy
A tax expert used by BBC Verify to back its analysis of the inheritance tax row with farmers now says the policy needs to change.
Dan Neidle, who was quoted by the broadcaster’s ‘truth checking’ unit, had criticised ‘over-the-top’ coverage on the impact of the tax changes.
But yesterday he performed a ‘rapid reverse ferret’ as he said the Budget changes would hit farmers ‘too hard’ and tax avoiders ‘too lightly’.
Arguing that the policy needed to change, Mr Neidle suggested the Treasury should raise the inheritance tax cap dramatically to around £20million so only the ‘largest and most sophisticated farm businesses become subject to IHT’.
He also suggested creating a ‘clawback’ so if someone inherits a farm free of inheritance tax and then sells it, the inheritance tax reappears.
‘We’d be taxing farmers a lot less, but IHT-exemption-chasing investors a lot more,’ he tweeted. ‘All in all, the revenue difference for HMT is likely small.’
Mr Neidle said he had spoken to farmers and tax advisers who think the suggestion is ‘workable’.
At the Budget, Rachel Reeves announced reforms to inheritance tax relief which mean farmers will have to pay a 20per cent rate on land and property they inherit worth more than £1 million.
Dan Neidle, an expert used by BBC Verify, has said that Labour needs to change its inheritance tax policy on farms
Mr Neidle previously criticised the ‘over-the-top’ coverage of the changes, but yesterday did an about turn and suggested the reforms would hit farmers ‘too hard’
Thousands of farmers protested in London on Tuesday against the controversial reforms to inheritance tax relief which mean that mean farmers have to pay a 20 per cent rate on land and property they inherit worth more than £1 million
Ministers insist the changes will affect only the wealthiest quarter of landowners, but the National Farmers Union and other groups have warned the impact will be more widespread and could affect British food production.
Thousands of farmers protested in London on Tuesday against the controversial plans.
In a post on his Tax Policy Associates website, Mr Neidle used new data to calculate that, had the Budget changes had been in place in 2021/22, ‘fewer than 250 actual farm estates would have been charged inheritance tax in that year’.
However, at the same time, there were more than 125 estates worth at least £1.5million which were not held by ‘actual farmers’.
‘Post-Budget, these would pay some IHT (but much less than a “normal” person),’ he wrote. ‘And there’s another 300+ smaller estates using farmland for IHT planning purposes – these would mostly escape the Budget changes, and remain IHT-free.’
He said the Budget risks missing the target, with poor revenue prospects for the Treasury, while some individual farmers will pay too much and people who are not farmers will be ‘comparatively unaffected’.
Rachel Reeves has insisted the changes will only hit the wealthiest quarter of landowners, but farming groups say the impact will be more widespread
Tim Bonner, chief executive of the Countryside Alliance, accused Mr Neidle of U-turning.
He tweeted: ‘The Treasury’s chief cheerleader Dan Neidle executing a rapid reverse ferret on the #FamilyFarmTax Who would have known that farmers might have understood the economics of farming?’
Mr Neidle, who is a Labour Party member, was cited in a BBC Verify article, which has since been amended, saying: ‘Dan Neidle, an independent tax expert, says the number of actual farms affected is likely to be below 500 per year.’
The article said that the Government’s figures were ‘likely’ to be right concerning the number of farms affected by the inheritance tax raid. Sir Keir Starmer then trumpeted the BBC’s findings.
Shadow environment secretary Victoria Atkins last night accused Labour of risking the nation’s food security after the Government confirmed that farm buildings, vehicles, tools and livestock are all included in the valuation of the agricultural and business assets of an estate.
