OBR Report: Farm tax will penalise farmers and crofters for little benefit to Exchequer

Orkney and Shetland MP, Alistair Carmichael, has today responded to a new report by the Office of Budget Responsibility on the impact of changes to agricultural and business property relief on inheritance tax, warning that it confirmed that the changes are still “mired in practical problems”. The OBR found that the tax yield to Treasury from the changes was subject to a “high” level of uncertainty, due to behavioural changes.

Mr Carmichael is Chair of the Environment, Food and Rural Affairs Select Committee.

Mr Carmichael said:

“This report confirms that the government’s misguided approach to farm inheritance tax is still mired in practical problems and risks harming farmers and crofters for very little benefit to the Exchequer. In the words of one expert to my committee last year: ‘it hits the people they say they are protecting and it protects the people they say they are hitting’.

“It is deeply concerning that the OBR seems to expect that older farmers will be paying the hardest price from this tax. They followed the advice they were given throughout their lives and now they have had the rug pulled from under them before they can change their plans. With tax revenue expected to be highly uncertain and unstable for two decades, the logic behind these changes simply does not add up.

“Farmers, crofters and food producers are vital for our country. The government must do the right thing and rethink these plans, before it is too late.”