Tesco, Aldi, and Lidl have joined forces with British farmers to oppose the government's proposed inheritance tax changes, which were announced in the recent Budget by Chancellor Rachel Reeves. These changes, set to take effect in April 2026, will impose a 20% inheritance tax on farms valued over £1 million. The Office for Budget Responsibility (OBR) predicts the tax will generate £500 million annually by 2029, but warns that this estimate carries significant uncertainty.
The tax changes have sparked concern among farming communities, who fear a reduction in investment due to increased financial burdens. Older farmers, in particular, may face difficulties restructuring their businesses to mitigate these new costs. Retail giants, including Asda and Morrisons, have already expressed their support for the farmers, while Sainsbury's and Marks and Spencer have urged the government to heed these concerns.
Ashwin Prasad, Tesco's chief commercial officer, emphasized the potential risk to the nation's food security if the tax is implemented without further consultation.
"the UK's future food security is at stake"
- Ashwin Prasad, Tesco's chief commercial officer
Prasad further stated that recent policy changes have already made it challenging for farmers to plan and invest effectively.
"After years of policy change, it has been harder than ever for them to plan ahead or to invest in their farms."
- Ashwin Prasad, Tesco's chief commercial officer
Lidl echoed this sentiment, calling for a comprehensive review of the tax policy.
"concerned that the recent changes to the Inheritance Tax (IHT) regime will impact farmer and grower confidence and hold back the investment needed to build a resilient, productive and sustainable British food system."
- A Lidl spokesperson
"We will be raising our concerns with the government at any opportunity we get."
- A Lidl spokesperson
Marks and Spencer also expressed support for a pause and consultation on the policy.
"We support calls for the government to pause the changes to IHT and to consult with the industry to ensure they avoid placing risk on the investment needed to guarantee the future of UK food security, the protection our countryside, and the safeguarding of a vital part of our national life."
- Marks and Spencer spokesperson
Aldi stressed the importance of enabling the farming sector to invest confidently in its future.
"We all need a farming sector that can confidently invest in its future and continue to produce high-quality British food."
- Aldi
The National Farmers Union (NFU) has also voiced its willingness to collaborate with the government in refining the policy. NFU President Tom Bradshaw indicated that farmers are prepared to engage constructively with policymakers.
While the OBR has projected significant revenue from these tax changes, it acknowledges uncertainty surrounding its estimates. The government's budget watchdog has been contacted for comment by the BBC.