Autumn Budget 2026: What It Means for Farmers and Rural Businesses
Red diesel relief extended to July 2027, fertiliser tariffs cut, no change to the farm inheritance tax reforms and a higher wage bill. What the 28 October Budget means for farms, and what to do next.
The Chancellor, John Healey, delivered the Autumn Budget on Wednesday 28 October 2026. For farmers, growers and rural businesses it was a quiet Budget rather than a dramatic one. There is help with fuel and fertiliser costs, a higher wage bill to plan for, and no change to the inheritance tax reforms that many farming families had hoped would be revisited. Here is what was announced, how the farming bodies reacted, and what it means for you.
Red diesel: the cut runs until July 2027
The 3.7p per litre cut in red diesel duty has been extended until 1 July 2027, according to Farmers Guide's Budget report. The Treasury also extended the 5p cut to main fuel duty for a further six months and deferred the planned inflation increase to 1 July 2027 (HM Treasury, 28 October 2026).
What this means for you: your fuel costs should not jump this winter or spring because of duty, but 1 July 2027 is now a date to plan around. The NFU welcomed the extension but warned it offers "minimal relief", pointing out that fuel prices are 65% higher than a year ago.
Fertiliser: tariff cuts from 26 November
The government is removing or cutting tariffs on more than 100 products, "alongside tariff cuts on kerosene and fertiliser to support households and farmers facing higher costs" (HM Treasury). Farmers Guide reports that the reduced tariffs take effect from 26 November, with fertiliser products expected to see tariffs cut by between 2% and 6.5%.
The Agricultural Industries Confederation pointed out that most fertiliser already enters the UK tariff free, so the change matters most for imports from countries where tariffs currently apply. It is worth asking your supplier whether prices will change after 26 November.
Inheritance tax: no change to the farm reforms
The Budget did not announce any changes to the reforms to Agricultural Property Relief and Business Property Relief. The £2.5 million allowance for 100% relief, introduced in April 2026, stays as it is. Advisers quoted by Farmers Guide also noted that there were no changes to the plans to bring pensions into inheritance tax calculations from April, which could complicate things for families holding farmland in a self-invested personal pension.
What this means for you: if you had been waiting to see whether the rules would soften before planning succession, the answer for now is no. This is a good time to talk to your accountant or solicitor about your plans.
Wages: the National Living Wage rises in April
From 1 April 2027 the National Living Wage rises by 3.9% to £13.21 an hour (HM Treasury). Cheffins warned that this will add to the farm labour bill, especially for businesses relying on seasonal and lower-paid staff. Build the new rate into your budget for the 2027 season now.
Rural business rates and smaller tax changes
Retail, hospitality and leisure businesses in England get more help with business rates from 1 April 2027. The full Small Business Rates Relief threshold rises to a rateable value of £18,000 and tapered relief to £21,000 (GOV.UK). That may help if you run a farm shop, café, holiday let business or other diversified enterprise that qualifies, so check with your council. The Business Asset Disposal Relief lifetime limit falls from £1 million to £500,000, which Fisher German expects to have minimal impact for most rural and land-based businesses.
How the farming world reacted
Reaction was mostly disappointed. NFU president Tom Bradshaw said the Budget "has left farmers feeling abandoned", and the NFU had hoped to see the Annual Investment Allowance extended to cover infrastructure such as on-farm reservoirs and poultry housing. CLA president Gavin Lane welcomed the red diesel extension and the business rates change, but said the challenges rural areas face "have been overlooked". The Nature Friendly Farming Network said the "overwhelming" demand for SFI funding shows that "farmers are ready to act".
Farm funding: where things stand this winter
The Budget did not announce new farm grant schemes, and several of Defra's main offers are currently closed:
- Sustainable Farming Incentive. SFI26 is closed because its budget has been allocated. Defra says it plans to offer an SFI scheme in 2027 and will share details "as early as possible" (Defra Farming blog).
- Capital Grants 2026. Closed on 1 September 2026 (Rural Payments Agency).
- Farmer Collaboration Fund. Round 1 closed on 30 September 2026 (GOV.UK).
- Farming Futures R&D Fund. The £28 million Healthy Soils and Water for a Sustainable Environment competition opens on 19 November 2026 and closes at 11am on 28 January 2027. It is for collaborations led by a UK registered business (Innovation Funding Service).
Keep an eye on the GOV.UK funding for farmers page for new dates.
Funding you can look at now
Browse farming and agriculture grants on GrantMatch, read our guide to farming grants in the UK, or see the Healthy Soils and Water competition (opens 19 November). If you also run a charity or small business, read what the Budget means for charities and small businesses.
See grants that match your farm, free. Create a free GrantMatch account, tell us what you do and where, and we'll show the open grants you're eligible for, with alerts when new ones appear.
Figures and quotes come from HM Treasury's Budget documents of 28 October 2026 and Farmers Guide's Budget report. The government may change the detail as it publishes guidance, so always check GOV.UK before you act.