Paula Hynes: UK farmers are fighting for survival

The simple fact is the UK Labour Party lied to UK farmers, a bold statement it may seem but it is true as Labour promised farmers and the National Farmers Union that UK tax measures would not be changed if they came into political power, more importantly they assured farmers that inheritance tax would not change. 

In fact, numerous Labour politicians publicly stated that UK taxes would not change. UK Labour seemed like a fresh beginning for the British voter after their Brexit turmoil and on July 4, 2024, they won an overwhelming victory in the UK elections taking 412 seats of the 650 available whilst the Conservative party had their worst election in 200 years.

Sounds like a fresh start for the UK under a new government but there was a major flaw with Keir Starmer's election manifesto. His Labour calculator wasn’t accurate and he, like many more Labour politicians, lied to voters. 

All of which became apparent on the October 30, 2024, when Rachel Reeves announced tax increases of £40bn targeting the hard-working UK farmer as her cash cow. 

Us Irish farmers have seen hard times of late but I have long watched on as it would seem UK politicians would happily see their farmers go out of business, and in turn policy would have that family farm turned into a nature reserve. 

There are actually 13,000 fewer farmers in the UK in the last five years, that is over 10% of farmers having left the industry in such a short space of time. Labour claim they found a black hole in the UK exchequer funds; in their words the Rwanda scheme was underfunded as was funding for the migrant crisis.

Keir Starmer claims he has made the largest financial package in UK history available to farmers, a total of £5bn over two years which sounds magical, but my calculator makes that a figure of £2.5bn a year yet their pre–Brexit CAP funding from the EU was £3.5bn a year for farmers.

Taxes

Like many farmers, we have a crew cab jeep, it is taxed commercially and to be fair, it is the workhorse of the farm, 50% of the time there is a cattle box hitched to it when it hauls cattle feed. As of April 26, UK farmers pay the same tax as cars on these vehicles, allowances on the purchase of the farm vehicle will be limited and should a larger farm provide a crew cab vehicle for an employee, the employee will be taxed as if it were a company car. 

The rate of employer's contribution for national insurance (similar to our PRSI) will rise to 15% making the cost of employing farm staff beyond many farms with the rate at which this taxation begins being nearly halved down to £5,000. 

The UK equivalent of our EU single farm payment, the English BPS-linked payment has been dropped to a max of £7,200 for 2025, a drop of up to £25k for many farms. 

Fertiliser is one of the costliest inputs on any farm but not costly enough in the eyes of the new Labour government as they have just slapped an extra £50 a ton on in the form of a carbon tax. 

The hardest hitting of all tax measures is inheritance tax which they predict will in time raise £520m a year for the UK exchequer. Seems like quite a lot of money generated for something they claim will impact very few farmers. 

Agricultural accountant Andrew Robinson told me the new tax measures will impact 80% of his firm's farming clients, adding: 

The budget was stated to be one that encouraged growth in businesses of all types and would not affect farm families, this is clearly far from the reality of budget proposals.

There are all sorts of figures being thrown around in the media, such as £1m thresholds and £3m thresholds. The £1m threshold is non-transferable between spouses, the £3m figure is a red herring and almost impossible to reach without extremely complex tax planning. 

The correct maximum threshold for a couple is £2.65m but that combines all farm assets from land to livestock. 

The simplest way to avoid the inheritance tax is place all the farm assets in a trust fund or gift them to younger family members — land, livestock, buildings, machinery, etc. 

But here is the catch, the transfer must be in place for seven years to avoid increased taxation, essentially you can’t die for seven years after you have all the paperwork completed, otherwise good oul Labour are gonna cash in on your untimely passing with a hefty tax bill. 

Protests

Thousands of farmers turned out for the protest in London against these tax measures. En-route they delivered vast amounts of their produce to food banks to support those in need, there has always been a huge sense of pride amongst UK farmers in their produce. 

Up to 6,500 farmers turned up at a protest in Lisburn in Northern Ireland the night before to show solidarity as they are also impacted by these tax measures. Labour, it would seem, has lost sight of UK food security though as the farmer protest has fallen on deaf ears, team Starmer still believe their own calculations.

It would seem UK farmers will in time have to resort to French-style farmer protesting and possibly create blockades to get Keir Starmer to see reality. As it stands, the French farmers are back out protesting again due to the EU trying to push through the Mercosur deal which will have a huge negative impact on EU farmers. 

Many of you non-farmer readers may think us farmers are always out protesting and complaining. The simple fact is we are being driven out of business by low food prices and policies. Many Irish political parties claim they will fight to maintain the nitrates derogation for Irish farmers, they didn’t seem to fight too hard two years ago when the derogation was reduced from 250 to 220.

I am wary of what our next government will be, some Irish political parties are promising too much. A hard-working Minister for Agriculture who will fight for Irish farmers will be crucial but while I await the outcome of our election, I stand in solidarity with our UK agri counterparts, they are not protesting for the sake of protesting, they are fighting for survival.