Why diversify your farm?
Farm diversification generates additional income, reduces reliance on volatile agricultural markets, and makes use of underutilised buildings and land. Choose from retail, tourism, renewable energy, or events - each has different compliance requirements.
1. Executive Summary
Maximum 1,000 words (2 pages). Written last but appears first. Summarises business concept, opportunity, and funding needs.
2. Personal Summary
Your background, skills, qualifications, experience. Why you're the right person.
3. Business Concept
What your business does, problem solved, target customers, business structure.
4. Products and Services
Features, benefits, unique selling points, pricing strategy, intellectual property.
5. Market Analysis
Market size, growth trends, customer demographics, buying behaviours.
6. Competitive Analysis
Direct and indirect competitors, strengths, weaknesses, your competitive advantage.
Farm shops and direct selling
Selling food direct to consumers requires food business registration at least 28 days before opening. VAT treatment varies by product type.
Farm shops selling food must register as a food business with the local authority. The only exception is a producer who supplies small quantities of their own unprocessed primary products, such as fruit, vegetables or eggs, directly to consumers or to local shops that sell to consumers. Once you process food, for example by butchering meat, you must register.
Registration requirement
Mandatory - at least 28 days before opening
Registration fee
FREE
Who to register with
Local authority Environmental Health department
Food safety system
HACCP-based system required (Safer Food Better Business available)
Allergen information
Must provide information on 14 major allergens
Food Hygiene Rating
Displayed mandatory in Wales and NI; voluntary in England
Inspection frequency
Based on risk rating - can be annual or less frequent
Register your food business
Register with your local authority at least 28 days before opening. Can be done online through the Food Standards Agency portal or direct to local council.
Implement HACCP
Use Safer Food Better Business (free from FSA) or develop your own food safety management system based on HACCP principles.
Set up allergen management
Document all 14 major allergens in your products. Train staff on allergen awareness. Display information for customers.
Prepare for inspection
Environmental Health Officers can visit without notice. Ensure premises, processes, and records are always inspection-ready.
Register a food business (opens in a new tab)
You do not need to register as a food business if you only supply small quantities of your own primary products, such as fruit, vegetables or eggs, direct to consumers or to local shops that sell to consumers. Once you sell bought-in food or process food, for example by butchering meat, register with your local authority at least 28 days before you start.
Most food is zero-rated for VAT, but confectionery, ice cream, soft drinks, alcohol, crisps and hot takeaway food are standard-rated. If you are VAT-registered, keep sales records that separate each rate.
Who must register, how to register with the local authority, and when.
The food safety management system your shop needs, and the free tools to set it up.
Camping and glamping
Farm camping benefits from the 60-day exemption in England, but glamping structures typically need planning permission.
Camping without planning permission
Up to 60 days a year (Class BC)
Maximum pitches
50 at any one time
Before you start each year
Notify the local planning authority
Facilities
On-site toilets and waste disposal
Not allowed on
SSSIs, scheduled monuments, listed building sites
Flood zones 2 and 3
Prior approval needed each year
Certificated locations
Up to 5 caravans, no site licence
Larger or permanent sites
Planning permission needed
Glamping pods and cabins
Planning permission needed
Caravan site licence
From the council, unless exempt
Licence conditions
Spacing, fire safety, water, drainage, refuse
Run a caravan or campsite (opens in a new tab)
Planning permission, licensing, and safety requirements for farm camping.
Holiday accommodation
In England, converting farm buildings to holiday lets can use Class Q or Class R permitted development. The furnished holiday lettings tax regime ended on 6 April 2025, so holiday lets are taxed as standard residential property income.
Converted farm buildings
A change of use from agricultural needs planning permission unless a permitted development right applies
Class Q (to dwellinghouses)
Up to 10 dwellinghouses and 1,000m² cumulative floorspace on an established agricultural unit, each no more than 150m² - rules in force since 21 May 2024
Class Q eligibility
The site must have been part of the established agricultural unit on 24 July 2023, with further conditions where it joined or left the unit later
Class Q prior approval
Apply to the local planning authority - covers transport and highways, noise, contamination, flooding, siting, design and natural light
Class R (to flexible commercial use)
Includes hotels (Class C1) - up to 1,000m² cumulative floorspace; building must have been used solely for agriculture on 3 July 2012, with other timing rules for buildings used before or after that date
Class R process
Notify the local planning authority at 150m² or less; apply for a prior approval determination above 150m²
New build holiday accommodation
Needs planning permission
Holiday-only conditions
Planning permission may restrict use to holiday accommodation
Permitted development for agricultural buildings (opens in a new tab)
Class Q prior approval, building regulations, and the post-FHL tax treatment.
Renewable energy
Solar, wind, and biomass can generate income and reduce costs. Planning requirements vary by technology and scale.
Rooftop solar (agricultural buildings)
May qualify for permitted development subject to conditions
Ground-mounted solar
Full planning permission required - no permitted development
Small-scale (under 50kW)
Planning permission required but often viewed favourably
Medium and large-scale (50kW-100MW)
Planning permission from the local planning authority + may need EIA screening
Nationally significant (over 100MW)
Development Consent Order from the Planning Inspectorate under the Planning Act 2008 (threshold raised from 50MW on 31 December 2025)
Agricultural land grade
Grade 1-3a faces scrutiny; Grade 3b-5 preferred
Grid connection
Apply to DNO - can take 6-18 months
Check grid connection availability
Contact your Distribution Network Operator early. Grid capacity constraints can delay or prevent projects.
Assess agricultural land classification
Solar on Best and Most Versatile (BMV) agricultural land faces greater planning scrutiny. Commission ALC survey if unknown.
Submit planning application
Include: site plans, landscape assessment, biodiversity impact, agricultural justification, glint/glare assessment.
Renewable energy planning (opens in a new tab)
Planning permission, land classification, and financial support for farm renewables.
VAT, riding establishment licensing, and insurance requirements.
Events and weddings
Farm barns are popular for weddings but require planning permission, premises licensing, and fire safety compliance.
Converting farm buildings to event venues or hosting commercial events on agricultural land requires planning permission. Agricultural permitted development rights do not extend to event use.
Change of use
Required - event venues are usually Sui Generis (use class D2 was abolished in September 2020; narrow cases may fall within Class F.2 or E)
Typical conditions
Limits on event numbers, hours, noise levels, parking
Neighbour consultation
Planning authority will notify neighbours - objections common
Traffic assessment
May be required for larger venues
Noise assessment
Often required - impacts licence conditions
Listed building consent
Required if barn is listed or in curtilage of listed building
Common planning conditions for event venues
Event numbers: Maximum events per year (typically 20-50 for weddings)Operating hours: Music to cease by 11pm or midnightNoise limits: Maximum decibel levels at boundaryParking provision: Minimum spaces per attendeeTraffic management: May require marshals for larger events
Breaching planning conditions can result in enforcement action and loss of permission.
Change of use planning permission (opens in a new tab)
Planning, licensing, and fire safety for farm weddings and events.
Business rates
Agricultural land is exempt from rates, but diversified activities are rateable. Small business relief may apply.
Agricultural land exemption
Agricultural land and buildings are exempt from business rates (Local Government Finance Act 1988)
Farm shops (own produce only)
May remain exempt if selling only own farm's produce
Farm shops (mixed produce)
Rateable if selling goods not from the farm
Small business rates relief
100% relief if RV under £12,000; tapered to £15,000
Rural rate relief
Mandatory 100% relief for the sole village shop or post office (RV up to £8,500) or sole pub or petrol station (RV up to £12,500) in settlements under 3,000; councils may grant discretionary relief up to RV £16,500
Holiday accommodation
Business rates apply in England if available for letting 140+ days AND actually let 70+ days per year
Renewable energy installations
Business rates apply to solar arrays, wind turbines, AD plants
Check liability for new activities
Contact your local council's business rates team when starting diversification to understand your liability.
Apply for small business rates relief
If eligible, apply to your local council. Relief is not automatic - you must claim it.
Inform your agricultural insurer
Diversification may not be covered by standard farm insurance. Notify your insurer of all new activities.
How diversification affects your rates liability and available reliefs.
Insurance
Standard farm insurance rarely covers diversification. You'll need specialist cover, especially for tourism activities.
Employers' Liability
LEGAL REQUIREMENT if employing staff - minimum £5 million
Penalty for no EL insurance
Up to £2,500 per day without valid insurance
Public Liability (general)
Recommended minimum £5 million
Public Liability (tourism/events)
Minimum £10 million recommended
Product Liability (food sales)
Covers claims from food products - minimum £2-5 million
Property insurance
Cover for buildings, equipment, and stock
Business interruption
Covers lost income if unable to trade
Key insurance considerations for diversification:
Disclosure: Always inform your agricultural insurer of diversification activities - failure to disclose may invalidate coverSpecialist cover: Some activities (farm tourism, events, food processing) may need specialist policiesSeasonal variations: Cover levels may need adjusting for peak seasonsCombined policies: Farm insurance packages often include diversification options
Review existing farm policy
Check if your current agricultural insurance covers proposed diversification activities. Most don't automatically.
Obtain specialist quotes
For tourism, events, or food processing, get quotes from specialist insurers familiar with rural diversification.
Display certificate
Employers' Liability certificate must be displayed where employees can easily read it.
Start with the insurance the law requires: if you employ anyone, you must have employers' liability insurance with at least £5 million cover, and business vehicles need motor insurance.
Duties for any new business you run
Whatever you add to the farm, the usual duties apply once you open to the public or take on staff.
Risk assessment, the health and safety policy, and what you must provide for staff.
The steps of an assessment and what to record.
Who needs it, the minimum cover and the exemptions.
You must not discriminate against job applicants, employees or workers because of a protected characteristic, and you are liable for what your staff do unless you took all reasonable steps to prevent it.
What to do when you hold customers' or staff details.
Check eligibility for Farming Investment Fund grants and rural business support.
FETF, SSIG, and other capital grants for farm equipment, technology, and infrastructure improvements.