Farmers are protesting against tax because that’s what they like to do
Farmers are protesting against tax because that’s what they like to do – according to an expert who used to work for them, and according to the facts themselves, it seems.
Richard Murphy of Funding the Future used to work as an accountant for farmers, back in the day, half a century ago. He says they were complaining about their taxes even then – decades ago; it’s what they like to do because by nature they are miserable.
Apparently they do have reasons to be – just not the reasons we’ve been told.
I know. Quelle surprise! Let’s hear what he has to say:
Farmers are not currently making enough money to be viable, simply as a business.
So why are they complaining about Inheritance Tax – with a big demonstration in Westminster today (Tuesday, November 19, 2024)?
Farmers have lost subsidies due to Brexit; they give their produce to large food manufacturers who take huge profits before paying them; and the food that is manufactured then goes to supermarkets that also take a large profit while keeping the prices they pay as low as they can.
So farmers should be angry at the government for not protecting them against the food manufacturers and the supermarkets, right?
It is also possible to say that if they’re not making money from using the land, then the land is worthless and they shouldn’t be paying Inheritance Tax on it.
But farmland changes hands for significant amounts of money. This is because people have been buying it to make use of the Inheritance Tax loophole that existed before October’s Budget, allowing owners of farming land and assets to escape that tax.
So farmland is now a financial instrument, being used to reduce tax bills.
And real farmers should be delighted that Inheritance Tax is being levied on farmland because it can no longer be used for financial purposes by rich opportunists.
It would only have a value for farming purposes – but for farming purposes it clearly has no value at all and may be passed on without triggering the tax.
This would have the knock-on effect of making farming affordable for people who want to become farmers.
In fact, then, all the real farmers have to do is sit still, wait, and do their best not to die for a while.
This is because it will probably take a few years for the financial whizz-kids and opportunists to realise that the jig is up and start divesting themselves of the farmland, looking for another tax dodge in which to sink their cash.
This will drive the price of farmland through the floor, making it possible for the (real) farmers to demonstrate that they don’t have assets meeting the threshold of the Inheritance Tax that Rachel Reeves has imposed. They won’t have to pay it, and aspiring farmers will be able to afford to get into the industry.
Seen that way, Reeves – and Labour – has done farmers an enormous service. And the demonstrators in Westminster would be better-off going home.
AFTERTHOUGHT: What really annoys me about this is that, once again, we are being fed a pack of lies by the media.
Look at this clip from Sky News:
The prime minister insists the “vast majority of farmers” will not be affected by changes to inheritance tax.
Sky’s @pkelso is here to break down the figures ahead of today’s farmers protest. https://t.co/ZNWddwNrRV
📺 Sky 501, Virgin 602, Freeview 233 and YouTube pic.twitter.com/YHJiwFUy5e
— Sky News (@SkyNews) November 19, 2024
The claim is that people with assets worth more than £1.5 million may have to pay the new Inheritance Tax – 49 per cent of farmers. But this isn’t true, because the tax is only payable on assets worth more than £3 million – not counting the £1 million included in tax relief.
We are all being misled by the media – especially farmers. I wonder why. Could it be that some TV and newspaper executives have cash squirrelled away in farmland?
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Not so long ago, former Conservative MP David Gauke wrote a very good article in defence of Inheritance Tax that appeared on the Conservative Home Website.
Here is an extract which deals with some of the myths that surround it:
“IHT is strikingly unpopular given how few pay it (fewer than four per cent of estates) and how little (£7 billion a year) it raises. It offends many people’s sense of fairness and the natural desire to pass on one’s assets to one’s children. It is a tax that is hated by many Conservative members and the Conservative press. One can see why this might be tempting to abolish it – but it is a temptation best resisted.
Personally, I have never found IHT as offensive as some. The argument that it constitutes “double taxation” is unpersuasive. Lots of taxes are paid out of post-tax income, and if we want to abolish them all we would need much higher levels of income tax.
In any event, for most estates the bulk of the values derives from the appreciation in the value of the family home – a capital gain which has not been taxed at all. Nor is it some unspeakable intrusion on the grief of loved ones for an element of an estate to be taxed. In all likelihood, the beneficiaries in these circumstances will still be inheriting more than most people ever will. Good luck to them – but this hardly constitutes an intolerable hardship.”