Budget backlash: what does it mean for farm businesses and their future?

The Chancellor’s decision not to reverse changes to Agricultural Property Relief (APR) and Business Property Relief (BPR) has prompted renewed criticism from farming organisations, with industry leaders warning that uncertainty over taxation continues to undermine confidence and hold back investment. 

For farmers and landowners, the implications extend beyond inheritance planning. Decisions about succession, infrastructure, diversification and future business growth are all shaped by the financial pressures facing the sector. 

These issues will be explored at Farm Business Innovation 2026 at the NEC Birmingham, where visitors can join Unpacking the Budget with Farmers Guardian, a seminar taking place on 4th November, from 12.15pm to 12.45pm, on the Farmers Guardian Stand {FM520}. 

Inheritance tax remains a major concern 

One of the biggest points of contention is the Government’s decision to leave the changes to APR and BPR in place. 

Under the revised rules described in the Budget debate, inherited agricultural and business assets above the relevant allowances can face an effective inheritance tax rate of 20%, with an allowance available for transfer between spouses and civil partners. The changes have raised concerns about how farming families will fund potential tax liabilities without selling land, reducing investment or disrupting the future of their businesses. 

NFU president Tom Bradshaw said the Budget had been an opportunity for the Government to respond to concerns raised by farmers and restore confidence. “Today the phrase ‘food security is national security’ feels nothing but a hollow promise,” he said. 

The Country Land and Business Association (CLA) also criticised the wider policy environment. President Gavin Lane said too many policies were stifling growth and entrepreneurship in the countryside, adding that there remained a lack of understanding about the challenges of running a rural business. 

For farming families, the absence of further changes means succession and inheritance tax planning remain important considerations. Understanding asset ownership, business structures and the potential impact on the next generation will be essential when making long-term decisions. 

Investment and rising costs under pressure 

While the Chancellor announced some measures that could ease costs, industry representatives argue that these do not address the full range of pressures facing farm businesses. 

A cut to fertiliser tariffs is expected to offer some relief, while the extension of the fuel duty cut to July 2027 has also been welcomed. However, concerns remain over rising employment costs, taxation and the wider financial challenges affecting agricultural businesses. The National Minimum Wage and National Living Wage are also set to rise by 3.9%, prompting concerns about the effect on food producers and businesses reliant on labour. 

NFU president Tom Bradshaw described the extension of fuel duty relief as offering only minimal support against the pressures facing farm cashflow, particularly given higher fuel prices. He also called for greater support for productive investment, including extending the Annual Investment Allowance to cover infrastructure such as on-farm reservoirs and new poultry housing. 

For farmers considering new enterprises, these pressures underline the importance of understanding the full cost of investment before committing capital. Diversification can create additional income streams, but projects still need robust financial planning, realistic forecasts and a clear understanding of the risks involved.