Three major supermarkets hit back at farm tax

Supermarket giants Tesco, Aldi, and Lidl have publicly supported British farmers in opposing the government's proposed tax reforms in the budget. These supermarkets believe that the government's policy of imposing inheritance tax on farms valued at over £1 million will severely impact the UK's food security.

Tesco's Chief Commercial Officer, Ashwin Prasad, stated that "the future of British food security is at risk," and he called on the government to suspend the inheritance tax on farms valued at over £1 million. Tesco, the UK's largest supermarket, along with Lidl and Aldi, accounts for approximately 45% of the UK's grocery market, and their warnings will undoubtedly increase the pressure on the government.

In addition to these three supermarkets, Asda and Morrisons have also publicly expressed their support for farmers, while Sainsbury's has also called on the government to listen to farmers' concerns. Marks & Spencer (M&S) also released a statement on Wednesday expressing its support for farmers. "We will support the National Farmers' Union (NFU) in calling for a pause on this policy while a full consultation takes place," Mr. Prasad said. "After years of policy changes, it is more difficult than ever for farmers to plan or invest."

Analysis by the UK government's budget watchdog, the Office for Budget Responsibility (OBR), suggests that farmers may reduce investment due to the tax reforms. The OBR's analysis points out that while its estimate of the tax policy increasing revenue by £500 million per year by 2029 remains unchanged, there is significant uncertainty surrounding this estimate, and older farmers may find it difficult to restructure their affairs to minimize the new costs. Furthermore, farmers may also limit their tax burden by "reducing the value of their estates."

Aldi also supports calls for a pause on the policy, stating, "We need a farming sector that can confidently invest in the future and continue to produce high-quality British food." A spokesperson for Lidl said that the supermarket giant is "concerned that the recent changes to the Inheritance Tax (IHT) regime will impact the confidence of farmers and growers and hinder the investment needed to build a resilient, productive, and sustainable British food system." The supermarket has called for a full consultation and said, "We will take every opportunity to raise our concerns with the government."

Marks & Spencer also released a statement on Wednesday, stating that it has been working closely with the Farmers' Union and supports the NFU's call to "pause the policy while a full consultation takes place." A spokesperson for M&S said, "We support calls for the government to pause the changes to inheritance tax and consult with the industry to ensure they avoid risking the investment needed to secure the future of British food, protect our countryside, and safeguard a vital part of our national life." The spokesperson also stated that M&S has raised its concerns in discussions with the government.

Last October, Chancellor Rachel Reeves announced that from April 2026, farms valued at over £1 million would be subject to a 20% inheritance tax. Previously, farms and agricultural businesses were exempt from death taxes. Last December, protestors drove tractors through Westminster in protest. At the time, farmers said they were willing to work with the government, adding that there were "many ways" to make the policy "less bad." However, Labour leader Keir Starmer insisted that "the vast majority" of farmers would not be affected by the tax changes.