Budget 2024: What agri-supply businesses need to know

Today (30 October) the Chancellor Rachel Reeves MP delivered her much anticipated Budget to the House of Commons, outlining the Government's fiscal plans for the forthcoming financial year.

The Agricultural Industries Confederation (AIC) has analysed the Chancellor's announcement, summarising the important and relevant points for Member businesses in the agri-supply industry below.

Taxation

The rate of employer National Insurance Contributions (NICs) will rise by 1.2% to 15% from April.

The lower rate of Capital Gains Tax (CGT) will rise from 10% to 18%, and the higher rate from 20% to 24%.

HM Treasury has confirmed changes to Inheritance Tax and Agriculture Property Relief (APR) and Business Property Relief.

Farms will continue to have 100% relief on agricultural and business assets worth under £1 million, with there being 50% relief above that.
The change will be subject to primary legislation and will not be introduced until April 2026. The Government expects to raise £520 million from this measure.

No rise in fuel duty.

Income tax thresholds will not be frozen beyond the current freeze running to 2028-29.

Increase the capital gains rates on carried interest to 32% from April, up from 28%.

From 1 April 2025 for Corporation Tax, and 6 April 2025 for income tax, double cab pick-up vehicles (DCPUs) will be treated as cars for the purposes of capital allowances, benefits in kind, and some deductions from business profits.

Investment

Business Asset Disposal Relief (formerly known as Entrepreneurs' Relief) will stay at 10% this year before rising to 14% in April 2025 and 18% from 2026-27.

£70 billion of investment through a new national wealth fund, with reforms to "planning laws to get Britain building again".

A Trade Strategy to be produced in 2025.

Defra/Agriculture

The total Department for Environment, Food & Rural Affairs (Defra) budget will increase from £7.3 billion in 2024-25 to £7.5 billion in 2025-26.

The farming budget will be £2.4 billion in 2025/26 with £1.8 billion for environmental land management schemes.

Additional £3.4 billion to the Scottish Government through the Barnett Formula funding, an extra £1.7 billion to the Welsh Government and £1.5 billion to the Northern Ireland Executive in 2025-26.

£208 million in 2024-25 and 2025-26 to support the transformation of the Government’s biosecurity facilities at Weybridge.

Faster phase-out of delinked (former BPS payments). All payments in England in 2025 will be capped at £7,200.

£6 million of additional funding for the Food Standards Agency (FSA).

Environment

Farmers with expiring HLS or Higher-Tier agri-environment agreements this year will be offered an extension to their existing agreement.

The UK Carbon Border Adjustment Mechanism (CBAM) will be introduced on 1 January 2027, placing a carbon price on goods that are at risk of carbon leakage imported to the UK from the aluminium, cement, fertiliser, hydrogen and iron and steel sectors.

The main rates of the Climate Change Levy (CCL) for gas, electricity, and solid fuels will be uprated in line with Retail Price Index (RPI) in 2026-27. The main rate for liquefied petroleum gas will continue to be frozen.

The Government will increase the Plastic Packaging Tax (PPT) rate for 2025-26 in line with CPI inflation. Businesses will be permitted to use a mass balance approach to evidence recycled content in chemically recycled plastic for PPT.

Further detail

AIC will go through the full Budget in detail and advise its Members of further policy information.

With a new Government in place, and new MPs now finding their feet, AIC will continue lobbying on its General Election 2024 priorities relating to land use, food security, trade and sustainability reporting.

Of particular note are the proposals relating to increases in NICs and Agricultural Property Relief, which will face a 50% rate of tax on qualifying assets above £1m.

AIC will work closely with farming unions as this may have knock-on impacts for wider AIC Member businesses.