Tesco, Aldi and Lidl hit back at agricultural inheritance tax
Tesco, Aldi and Lidl have backed British farmers in their dispute with the government over tax changes in the Budget.
Tesco chief commercial officer Ashwin Prasad said “Britain’s future food security is at stake” and the government should stop imposing inheritance tax on farms worth more than £1 million.
Tesco is Britain’s biggest supermarket and together with Lidl and Aldi they make up about 45% of the British grocery market, so their warning on Wednesday will increase pressure on the government.
Asda and Morrisons have already been vocal about supporting farmers in the dispute and Sainsbury’s has also called on the government to listen to concerns.
The BBC has contacted the Treasury for comment.
“We will support the NFU (National Farmers Union) call for a moratorium on the implementation of the policy while full consultations are carried out,” Mr Prasad said.
Adding: “After years of policy change, it is more difficult than ever for them to plan ahead or invest in their farms.”
It comes as the government’s budget watchdog, the Office for Budget Responsibility, suggested that farmers were likely to cut back on investment due to the tax raid.
The OBR released new analysis which said that although its estimate that introducing the tax would raise £500 million a year by 2029 was unchanged, it said the estimate was highly uncertain and older farmers would be forced to absorb the new costs. You may have to struggle to reorganize your affairs.
It also says farmers may try to limit their tax bills by “potentially reducing property value.”
Aldi also supported the call for a pause. It says: “We all need a farming sector that can confidently invest in its future and continue to produce high-quality British food.”
“That is why we are supporting calls from the farming community for the Government to pause the implementation of the proposed changes to inheritance tax until the next period of consultation takes place.”
A spokesperson for Lidl said the supermarket giant is “concerned that recent changes to the Inheritance Tax (IHT) regime will affect farmer and grower confidence and hinder the investment needed to build a resilient, productive and sustainable British food system “
German supermarkets called for a full consultation. “We will raise our concerns with the government whenever we get a chance,” it said.
Last October, Chancellor Rachel Reeves announced that farms worth more than £1m will have to pay 20% inheritance tax from April 2026.
Previously, farms and agricultural businesses were exempt from the death tax.
In December, protesters drove tractors into Westminster to protest.
In those days, NFU president Tom Bradshaw told MPs Farmers were willing to work with the government, saying there were “many ways” to make the policy “less bad”.
However, Sir Keir Starmer insisted the “vast majority” of farmers would not be affected by the tax changes.
