There was welcome news for farmers in the recent Spring Budget, as agricultural property relief (APR) will apply to the government’s Environmental Land Management schemes (ELMs).

However, Chancellor Jeremy Hunt also said he was abolishing the favourable tax treatment of furnished holiday lets, which will impact farmers diversified into holiday accommodation.

Elsewhere, Mr Hunt cut National Insurance contributions by 2% for employees and the self-employed, reformed the child benefit tax, and announced he would introduce a British ISA for investors.

On APR, Mr Hunt announced it will be extended from April 2025 to include land managed under environmental schemes.

Chartered financial planner at NFU Mutual, Sean McCann, said this would be 'good news' for farmers and landowners.

He said: “There had been concerns that land owners would be discouraged from participating in ELM schemes that involved taking their land out of agricultural production for fear of leaving their family with a large inheritance tax bill.”

The Country Land and Business Association (CLA) president, Victoria Vyvyan, said the group was 'pleased' to see the relief extended.

"This is welcome news and will help farm businesses deliver environmental benefits as well as food production," she said.

However, one of the Chancellor’s biggest announcements in today's Budget was to abolish the favourable tax treatment of furnished holiday lets from April 2025.

The move is set to detrimentally impact farmers and landowners who have diversified into on-farm holiday accommodation.

Ms Vyvyan said this is not good news for rural businesses: "The Chancellor is squeezing holiday let owners and stifling businesses that create jobs and support the rural economy.

“By converting unused or underutilised properties, that may not be suitable as homes in the private rented sector, into high-quality holiday accommodations, property owners contribute to the local community's economic vitality."

Mr Hunt also announced that the government will shave another 2% off National Insurance contributions for both employees and self-employed.

Speaking on behalf of NFU Mutual, Sean McCann said this would put more money in the pockets of workers.

But he added: “The deep freeze on tax thresholds until 2028 remains, and the impact of fiscal drag means many people are paying more tax in real terms.”

NFU president Tom Bradshaw said while there some of the headline announcements, the Chancellor had "missed an opportunity to deliver resilience for food producers. "

“We welcome the government backing the NFU’s call for the extension of APR to land in ELMs as it will remove a barrier of entry for a number of farm businesses," he said.

"But the extension of this beyond ELMs may have an adverse impact on food production and farm tenancies and we will work with Treasury to assess those implications.

"The announcement on the abolition of the furnished housing letting regime is a significant concern as it’s an important source of diversification for farm businesses which underpins resilience.

"We will be looking to engage further with Treasury on this announcement.”