WHEN Labour Chancellor Rachel Reeves announced her tax raid on family farms, it blindsided farmers and farming organisations. During the General Election campaign, Labour candidates repeatedly promised that a new government would not change the rules on Agricultural Property Relief and Inheritance Tax on farm holdings.
When the Chancellor reneged on those promises, there was outrage amongst those misled by candidates like Henry Tufnell.
AVOIDING THE NEW TAX BY COINCIDENCE
Around three weeks before Rachel Reeves dropped her tax bombshell on family farms, Henry Tufnell’s millionaire parents took steps to avoid any potential tax liability that could arise from a change in Agricultural Property Relief.
That’s embarrassing for the Mid & South Pembrokeshire MP. However, as a spokesperson for Mr Tufnell told The Pembrokeshire Herald: “As has been widely reported, it would seem that even Steve Reed, the Secretary of State for DEFRA, was not aware of the specific changes to Agricultural Property Relief (APR) and Business Property Relief (BPR) before the Budget was announced. It would, therefore, be implausible to suggest that Henry – a backbench MP – would have this kind of knowledge prior to the Chancellor’s Budget announcements before they were made public.”
And, of course, tax avoidance is perfectly legal.
While that statement is fair enough, what follows is, one critic said, “spectacularly unfortunate”.
But first, some context.
WHERE THE MONEY IS
The average Welsh family farm’s income is under £45k a year. While the land is valuable as a potential asset, it is only valuable as part of a farming enterprise. Land, as capital, can only be converted to cash by selling it. Selling productive farmland to, for example, a hedge fund wanting to build a solar farm reduces the viability of what’s left of the business and will drive up food prices.
That’s not likely to happen to the Tufnells, a family after whom Tufnell Park in London is named.
Mr Tufnell’s parents are a world away from the small family farms the tax will hit hardest.
Henry Tufnell’s father, Mark, owns Calmsden Farms, the 2,000-acre family estate in the Cotswolds, including a village in which all the residents are his tenants. He is a former President of the Country Land and Business Association. Meanwhile, Henry Tufnell’s mother, Jane, cofounded blue-chip investment management company Ruffer, which manages over £20bn in client investments.
It’s a hard-knock life.
AVOID TAX, SAYS PEMBROKESHIRE MP
We asked Henry Tufnell whether he would make a statement on the issue of tax avoidance schemes entered into by wealthy landowners.
The response The Pembrokeshire Herald received suggested that Pembrokeshire farmers should seize the opportunity to dodge tax while they could.
Mr Tufnell’s spokesperson told us: “The actions taken by Henry’s parents were based on professional advice from qualified financial advisers, reflecting prudent and responsible management of their family affairs.
“This is something every farmer in Pembrokeshire should consider in light of the Chancellor’s recent announcements to ensure they are prepared for the evolving landscape of farming taxation.”
That leads to the unfortunate conclusion that the people who are going to benefit most from the Chancellor’s tax raid will not be people depending on public services bereft of funding. Instead, it will be a bonanza for those tasked with finding ways to avoid paying taxes. If that is what the Labour government intended, it is a very odd political stance to take. Even more peculiar is Mr Tufnell’s advice to Pembrokeshire’s farmers to contact their financial advisors to that end.
POLICY MUST BE SCRAPPED
Samuel Kurtz, a Member of the Welsh Parliament who represents part of the Mid and South Pembrokeshire Westminster constituency, said: “This policy would devastate the hard-working family farms of West Wales; those vital food-producing businesses that deliver high-quality, environmentally sustainable produce to our shelves.
“When tax specialist Dan Neidle, whose earlier analysis Labour members once held up as justification for this policy, changes his position, saying it ‘hits farmers too hard and tax avoiders too lightly’, it then becomes clear that small, family-run farms would bear the brunt of its impact.
“Labour must now do the right thing: scrap this policy. It’s evident that it cannot, and will not, work.”
If, as Sam Kurtz suggests, the new tax will not work, the Treasury will not have to look far to discover why.
That a backbench MP – along with the Secretary of State for DEFRA and members of the Welsh Government – is telling farmers to dodge tax is so bizarre as to defy credibility. You couldn’t make it up.
