The Budget let farmers down. Now the margin has to come from inside the farm.

Oct 28

5 min read

Updated: Oct 29

The Chancellor called this a Budget for breathing space. Farmers did not get any.

John Healey stood up on Wednesday with diesel above £2 a litre, a hard summer behind much of the industry and a short list of modest, costed asks from the farming unions on his desk. He sat down having extended a fuel duty cut that was already in place and left almost everything else where it was. The NFU called the Budget a massive missed opportunity for food production and said farmers had been left feeling abandoned. They are right, and they should not have to be polite about it.

The government has said that food security is national security. A Budget that does almost nothing for the people who produce the food does not match those words. Farmers are being asked to absorb dearer fuel, higher wages and rising input costs, with no help on investment and no bridge for the businesses hit hardest this year.

Anger is fair. It is not a plan. No new money is coming, so the margin has to come from inside the business.

What farmers asked for, and what they got

Fuel. The temporary 5p a litre cut in fuel duty, due to end in December, now runs to 1 July 2027, and the 3.7p cut to red diesel duty is extended to the same date, according to the Treasury's Budget document. That keeps prices where they are. It does not bring them down: the Treasury's own figures put diesel above £2 a litre in October, up 41% since February. After July, red diesel returns to its pre-2022 rate and rises with inflation.
Inheritance tax. No change, and no sign of the rethink many farm families had hoped for. The reforms that took effect on 6 April 2026 stand: 100% relief on the first £2.5m of qualifying agricultural and business property, 50% above that, with unused allowance passing between spouses so that a couple can pass on up to £5m at the full rate. From 6 April 2027, most unused pension funds will also count towards an estate.
Investment. The NFU asked for the Annual Investment Allowance to rise to at least £5m and to cover buildings and infrastructure such as reservoirs. It stays at £1m. From April 2027 the main writing-down allowance falls from 14% to 12%, while the first-year allowance on new main-rate plant rises from 40% to 50%. The temporary interest-free loans the NFU proposed for businesses hit hardest this summer were not announced.
Selling or passing on a business. The lifetime limit for Business Asset Disposal Relief halves from £1m to £500,000 from April 2027. The Treasury says its separate changes to how company distributions are taxed will protect family successions.
Fertiliser and carbon. Tariffs on some fertiliser imports were cut the day before the Budget. The NFU's president, Tom Bradshaw, said the cut was unlikely to make a meaningful difference, since much fertiliser already came in tariff-free. It looks more like a gesture than help. The Carbon Border Adjustment Mechanism still arrives in January 2027.
Wages. The National Living Wage rises 3.9% to £13.21 an hour, and the 18 to 20 rate to £11.27, Personnel Today reports. Employer National Insurance is unchanged, but advisers point out that the £5,000 threshold stays frozen until 2031, so every pay rise now carries a little more employer tax with it.

Costs are moving faster than any relief on offer. The OBR expects inflation to peak at 3.8% early next year, and the NFU notes that its outlook for food prices is significantly higher than before. Farmers will carry much of that cost. Very little in this Budget helps them do it.

Three places to find the margin

When Westminster offers nothing, the work moves to the kitchen table. Three places to look are now plain.

1. Know what you own, and what it is worth

The inheritance tax ceiling is settled for now, whether farmers like it or not. That removes the excuse for waiting. A family group that cannot say which company owns which field, building and machine, or what each enterprise earns, cannot plan around a £2.5m threshold. Nor can its advisers, except slowly and at their hourly rate. The pension change and the smaller Business Asset Disposal Relief limit, both from April 2027, add to the list. I set out a five-part readiness test in an earlier Field Note on farm succession under the 2026 tax rules.

2. Cost the mile before the relief ends

The fuel duty cut has been extended to 1 July 2027, not made permanent. It is a stay of execution with a date on it. Any rate a haulier or feed mill sets this winter should be built on what a mile really costs, empty legs included, and tied to the government's weekly diesel price so that it moves when the relief ends. Two earlier pieces show how: what a livestock wagon mile really costs, and why a flat feed delivery rate makes the near farms pay for the far ones.

3. Find the cash inside the business

No loan scheme, no larger investment allowance. A business that wants to invest after a hard summer will have to find the money in its own stock, debtors and creditors first. That usually means working capital: feed and inputs bought early, stock held that nobody has counted, customers paying on terms set years ago. It is unglamorous work, and farmers should not have been left to do it alone. It is also the cheapest money a business has.

Where I can help

My work starts with a diagnostic, built from your own numbers. In a fortnight I can tell a family farming group, a haulier or a feed business what a mile, a tonne and a pound of working capital actually cost it, where the money leaks between its companies, and which three or four changes are worth making first. Every finding carries a figure and an owner. If the answer is that you do not need me, I will say so.

Farmers deserved better from this Budget, and they did not get it. The businesses that come through best will be the ones that use the next eight months to learn what each mile, tonne and pound actually costs them, and that bring those numbers to the argument for the next one.

If there is a number in your business you cannot fully account for, I would be glad to hear about it: hugo@upepoconsulting.com.

Sources

Checked against HM Treasury's Budget 2026 document, published 28 October 2026. Figures are taken from the sources listed and were correct at the time of writing. This is not tax advice: check the latest HMRC guidance and take qualified advice before acting.