An environmental charity has called for farmers’ tax breaks to be reformed to make them more nature-friendly.
In a new report, Where There’s Muck, There’s Brass, People Need Nature suggested benefits such as business rate exemptions, low duty on red diesel and inheritance tax relief should be linked to providing public goods.
According to the report, these tax breaks are worth £2.4bn a year to farmers – almost as much as the Common Agricultural Policy (CAP) annual budget.
Speaking to Farmers Guardian, the chief executive of the charity, Miles King, said: “If we are moving towards a system of public money for public goods for subsidy, then it is going to look fairly odd if we carry on with a system pulling in the opposite direction with the tax regime. Now is a good time to look at some of these things.
“If you are looking at something like business rates and red diesel, the benefit is going to flow to the people with the most land and the people who are using the biggest tractors most often, which is probably going to be the big arable farms.
“The question is, is that the best place for these tax breaks to flow to, and what public benefit is being derived as a result of them?”
It is not clear whether the proposed reforms would mean abolishing all tax breaks and spending the revenue raised on the environment, or giving farmers who opt into certain measures a chance to keep the benefits.
Mr King acknowledged he did not have a ‘fully baked’ programme of change, but wanted to spark a conversation about moving the tax system towards a public goods model over time.
“If you were to get rid of all these tax breaks now, at the same time as the subsidy system is under great threat of collapsing altogether, obviously I would say that would be a terrible idea,” he said.
“But the window of opportunity has opened to ask the questions.”