Up to 700 farm shops across Britain could be forced to close their doors because of Rachel Reeves’ recent budget, industry leaders have warned.
The potential closures represent nearly half of Britain’s 1,580 farm retailers and could put thousands of jobs at risk.
The Farm Retail Association (FRA) says shop owners are being “hit from both ends” by the Chancellor’s tax measures.
The stark warning comes as farm shops continue to face mounting pressure from increased business costs and changes to tax regulations.
The budget’s impact stems from multiple tax changes affecting farm businesses across the country.
A key measure includes increases to employers’ National Insurance rates and lowered thresholds for payments.
From 2026, farms worth more than £1 million will face the end of inheritance tax reliefs, forcing many to consider selling assets
GETTY
From 2026, farms worth more than £1 million will face the end of inheritance tax reliefs, forcing many to consider selling assets.
The British Retail Consortium has calculated that the budget added £7bn to retailers’ overall costs.
These changes are particularly challenging for farm shops, which many farmers established as a way to diversify and improve profitability.
Emma Mosey, chairman of the FRA and owner of Minskip Farm Shop, highlighted the dual challenges facing farm retailers.
LATEST DEVELOPMENTS
She said: “We’re facing the inheritance tax changes, which, as with other farms, will mean essentially selling off 20 per cent of assets every generation to pay those extra taxes.
“But we’ve also got the business side as well because we’re employing people in stores and that is going to cost more.”
The impact extends beyond shop owners to their employees, with thousands of jobs potentially at risk across the UK.
Sean McCann, a chartered financial planner at NFU Mutual said: “As a result of the £1million cap on agricultural property relief and business property relief combined, many farming families will face substantial tax bills, which could endanger many farm shops.”
McCann noted that many farmers had “diversified to improve profitability, and farm shops are a common way of doing that.”
The Government has defended its approach, stating that estates will pay a reduced effective inheritance tax rate of 20 per cent, rather than the standard 40 per cent. They added that payments can be spread over 10 years, interest-free.
Farmers have staged multiple protests against the budget changes across the country. This week, around 100 vehicles formed a 15-mile convoy along Edinburgh’s A1 bypass, from Old Craighall to the Gogar roundabout.
Protesters displayed signs reading “No Farms, No Food” and “Back British Farming”, with one placard describing Prime Minister Sir Keir Starmer and Chancellor Rachel Reeves as a “bunch of thieves”.
In London, farmers and tractors descended on the capital in December to protest the inheritance tax changes. The National Farmers’ Union (NFU) also saw three times their expected turnout when 1,800 members protested in London last November.
A Government spokesperson defended their position, stating: “Our commitment to farmers remains steadfast.” The spokesperson highlighted a £5 billion commitment to the farming budget over two years, including increased funding for sustainable food production.
They also emphasised plans for a 25-year farming roadmap focused on making the sector more profitable. The government described their approach as “fair and balanced,” noting it would affect around 500 estates next year.
They maintain these measures are necessary to “fix the public services we all rely on” while continuing to support the farming sector’s long-term development.
