Farm shops at risk of closing down as Rachel Reeves hits owners ‘from both ends’

Hundreds of British farm shops face closure amid the impact of Rachel Reeves’s tax-raiding Budget, with estimates suggesting up to 700 could shut their doors.

The potential closures represent nearly half of Britain’s 1,580 farm retailers, putting thousands of jobs at risk.

The British Retail Consortium has highlighted that the Budget added £7billion to retailers’ costs, threatening the future of these rural businesses.

The Budget’s impact on farm shops includes multiple financial pressures, with increased minimum wage costs and changes to employers’ National Insurance rates.

A significant blow comes from new inheritance tax rules, which will end tax reliefs for farms worth more than £1million from 2026.

The changes mean farming families may need to sell off 20 per cent of their assets each generation to meet tax obligations.

These combined pressures are affecting both the operational costs of running shops and the long-term viability of family farms.

Farm Retail Association chairman Emma Mosey, who owns Minskip Farm Shop, said: “We’re facing the inheritance tax changes, which, as with other farms, will mean essentially selling off 20 per cent of assets every generation to pay those extra taxes.”

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“But we’ve also got the business side as well because we’re employing people in stores and that is going to cost more,” she added.

Sean McCann, chartered financial planner at NFU Mutual, warned: “As a result of the £1million cap on agricultural property relief and business property relief combined, many farming families will face substantial tax bills, which could endanger many farm shops.”

Farmers have taken to the streets in protest, with demonstrations including a wreath-laying outside Downing Street and tractor blockades in Whitehall.

Yesterday, around 100 tractors formed a 15-mile convoy along Edinburgh’s A1 bypass, from Old Craighall to the Gogar roundabout.

Protesters displayed signs reading ‘No Farms, No Food’ and ‘Back British Farming’, alongside ‘Stop The Family Farm Tax’.

One placard targeted Prime Minister Sir Keir Starmer and Chancellor Rachel Reeves, describing them as a “bunch of thieves”.

The Labour Government maintains its commitment to farmers remains “steadfast” despite the protests and concerns.

A Government spokesman said: “We have committed £5billion to the farming budget over two years, including more money than ever for sustainable food production.”

However, with the FRA forecasting more than 700 farm shop closures in the coming decades, the future remains uncertain for many rural retailers.