The discussions centred on how the changes to APR and BPR could impact the future of farm businesses, as well as the acceleration of the phase-out in farm support payments, and the rise in National Insurance Contributions and the National Minimum Wage.
NFU Deputy President David Exwood and NFU Director of Policy Andrew Clark began by updating representatives from HSBC, NatWest, Barclays, Virgin Money, Oxbury Bank, Lloyds Banking Group, and UK Finance on the industry鈥檚 immediate reaction to the Budget.
鈥淔arm business confidence is already disastrous, but since the Budget we鈥檝e hit a new low,鈥� David began.
鈥淭hat鈥檚 the real challenge, the undermining of confidence and the fact that the core structures of so many businesses have been thrown into question.
鈥淒espite government statements about stimulating growth, this was an inflationary Budget across the board. Adding sudden tax burdens on family farms and shortening the timeline for phasing out farm payments has completely undermined any remaining confidence.鈥�
Investment drop off
The key concern the NFU sought to highlight was the potential for a drop off in investment across the sector, which is crucial to achieve the UK鈥檚 food security and environmental ambitions.
NFU chief economist Rohit Kaushish gave a breakdown of Defra鈥檚 spending commitments.
He explained the government has set out to be more transparent with its spending patterns as we await more information ahead of the multi-year spending review in 2025.聽
Points raised by NFU head of tax Michael Parker included:
- the abolition of FHL (Furnished Holiday Lettings) tax rules
- treatment of double cab pick ups
- CGT (capital gains tax) rate changes
- employer NI hike and NLW increase
- APR and BPR reform.
鈥�There will be very few scenarios where this 鈥� the planning itself and subsequent actions 鈥� will not come at a cost to some part of the business.鈥�
NFU Deputy President David Exwood
鈥淥ne of our priorities is around a transition period 鈥� that鈥檚 the biggest risk here,鈥� Michael explained, in relation to the introduction of APR and BPR changes from April 2026 onwards.
鈥淲e are also challenging the government on who they were actually aiming this measure at.鈥�
NFU Deputy President David Exwood added: 鈥淭here will be very few scenarios where this 鈥� the planning itself and subsequent actions 鈥� will not come at a cost to some part of the business.鈥�
Farm Business Investment Loans
NFU senior economist Sanjay Dhanda updated the banks on the NFU鈥檚 progress on proposals for an FBIL (Farm Business Investment Loan) scheme, which is intended to reduce the risk associated with investment in productivity and environmental measures for those farm businesses that are less well capitalised and face challenges in sourcing funding for much-needed investment.
Looking ahead to the opposition day debate in parliament, David Exwood said: 鈥淢Ps will have the chance to properly scrutinise the family farm tax and show their farming constituents where they stand in a vote.
鈥淚 hope they will consider the significant risks to the future of Britain鈥檚 family farms, as well as the wider implications for business costs and investment 鈥� essential components to futureproof British food production.鈥�
