Tesco Lidl and Coop are taking action against British inheritance tax reforms

Both retail chains warn that the British tax reforms over land property could jeopardise the farming sector’s future. In recent months, farmers across the UK have staged protests in London against the inheritance tax changes announced in the October Budget. These changes, set to take effect in April 2026, will introduce a 20 per cent levy on agricultural land exceeding thresholds between £1.3 million and £3 million, depending on the landowner’s marital status and property ownership.

Tesco’s stance-taking

Tesco’s chief commercial officer, Ashwin Prasad, expressed the supermarket’s stance on the issue, stating on Wednesday: “We fully understand the concerns raised by many smaller farms reliant on agricultural property relief and business property relief. We’ll be supporting the National Farmers Union’s calls for a pause in the implementation of the policy, while a full consultation is carried out. This is not just a debate about individual policies — the UK’s future food security is at stake.”

Lidl raised concerns 

Lidl similarly raised concerns about the reforms, noting that they could harm farmers’ confidence and hinder investments needed to build a sustainable and productive British food system. The company said it was “concerned that the recent changes to the IHT regime will impact farmer and grower confidence and hold back the investment needed to build a resilient, productive and sustainable British food system.”

Coop taking action

The Co-op Dairy Group has also taken action, informing its members in a letter that it had contacted government departments to advocate for a review of the policy. The group stated its support for pausing the reforms, emphasising the potential negative impact on farmers.

Supermarkets also criticized by farmers

Farmers have not held back their frustrations, with protests targeting major supermarkets. Tractors have been parked outside retailers to draw attention to the issue. However, Morrisons obtained a High Court injunction on 16 January to prevent further demonstrations at its stores. Before the October Budget, farming groups criticised supermarkets for squeezing their profit margins with low food prices and failing to adequately support British-grown produce.

Little government return, farmers already squeezed

On Wednesday, the British Office for Budget Responsibility (OBR) released an analysis of the inheritance tax policy, estimating it could generate an additional £500 million annually for the Treasury between 2027 and 2029. However, the OBR noted that revenue would likely decline after seven years as farmers adapt by gifting properties to heirs and restructuring their tax plans. The report highlighted that older farmers may face difficulties in rapidly adjusting their inheritance arrangements. Farmers argue that the sector is already under immense strain from climate change, shrinking subsidies, high inflation, slim profit margins, and increased competition from post-Brexit trade agreements. Source: FPC.

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