'Shameful betrayal': The 31-strong letter condemning Scottish farm tax change

All of Scotland’s Conservative MSPs have signed an open letter urging Chancellor Rachel Reeves to U-turn on her changes to the farm tax relief as questions have arisen over exactly how many farms will be affected.

The Chancellor’s announcement last week to remove the inheritance tax break for farms - Agriculture Property Relief (APR) - with assets worth more than £1 million has caused uproar from the rural sector. Unions have warned the government of a “militant” protest from farmers to come.

Ms Reeves last week claimed 72 per cent of farms would be unaffected by the move. The National Farmers Union (NFU), however, argues that cash-poor, medium-sized family farms will undoubtedly be affected if the rate remains at £1m.

NFU president Tom Bradshaw has reportedly said the Treasury and Defra agreed in a meeting to go come up with the “true figure” of how many farms could be affected.

The NFU pointed to the government’s own Defra figures, which it said indicated the true percentage of farms affected by the APR changes could be 66 per cent.

It has been reported the government’s figure was based on former claims for APR, but many assets on farmland were claimed for under a separate inheritance tax relief scheme – Business Property Relief (BPR), the union said. Under Labour, these schemes are now joined together.

The NFU said the Treasury has therefore undervalued many of the UK’s farms and the Defra data is more accurate. This data was worked out recently when farms had to register their value and size with Defra after the UK left the EU payments system, according to the union.

NFU president Tom Bradshaw said the Treasury and Defra agreed in an emergency meeting with him to go away and come up with the “true figure”. It comes as all 31 of the Scottish Tory MSPs have demanded Ms Reeves do a full U-turn on the move.

They described the decision as “a shameful betrayal of British farmers”.

The authors took aim at Labour’s environment secretary Steve Reed, stressed he had said only last year his party “have no intention” of changing farm tax relief.

The letter said: “We urge you to U-turn before British farms are lost forever because, as Sir Keir Starmer told the National Farmers Union last year, ‘losing a farm is not like losing any other business. It can’t come back’.”

The Labour government said the farm tax change was made to restrict the "generosity" of APR and the Business Property Relief for the "wealthiest estates". The first £1m of combined business and agricultural assets will continue to attract no inheritance tax.

But for assets over £1m, inheritance tax will apply with 50 per cent relief, at an effective rate of 20 per cent.

The Chancellor has insisted "only a very small number of agricultural properties" will be affected. However, unions have warned the reforms could force many farmers to sell their family farms to pay the inheritance tax bill, which would in turn put food security at risk.

Ms Reeves said many "difficult decisions" were needed in the Budget to fix public services and place the economy on a firmer footing.

A UK government spokesperson said the figures claiming about three quarters of farms will not be affected were based on some 500 APR and BPR claims from farms in 2021/22 which they said was the latest data available.

The spokesperson said they cannot comment on whether or not a meeting is taking place.