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.

All farm shops selling food must register as a food business with the local authority, even if only selling produce from your own farm.

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.

Set up a farm shop

Food registration, HACCP, and VAT requirements for selling produce.

Camping and glamping

Farm camping benefits from the 60-day exemption in England, but glamping structures typically need planning permission.

60-day rule (exempt camping) - England: Up to 60 days tent camping per year without planning permission under Class BC of the General Permitted Development Order 2015 (replaced the 28-day rule in 2023, England only). Maximum 50 pitches; annual prior notification to the local planning authority with a site plan showing pitches and toilet/waste facilities; not available on SSSIs, scheduled monuments, or listed building curtilage
Certificated Location (CL): Up to 5 caravans/motorhomes for club members only - exempt from site licence
Certificated Site (CS): Up to 5 touring units for club members - exempt from site licence
Caravan site licence: Caravan sites need a site licence from the local authority under the Caravan Sites and Control of Development Act 1960 unless a Schedule 1 exemption applies (such as Certificated Locations/Sites)
Glamping pods/cabins: Permanent structures require planning permission
Use class: C1 (hotels) or Sui Generis - change of use from agricultural

Check if you need planning permission: 60-day right (England) allows limited tent camping without permission if you notify your local planning authority each year and stay within 50 pitches. Certificated locations for 5 units don't need planning. Larger or permanent development needs planning. Note: Scotland, Wales, NI still use 28-day rule.
Apply for caravan site licence: If required, apply to local authority licensing department. You must have planning permission first.
Meet site licence conditions: Conditions cover: spacing between units, fire safety, water supply, drainage, refuse, site management.

Run a caravan or campsite (opens in a new tab)

Set up camping or glamping

Planning permission, licensing, and safety requirements for farm camping.

Holiday accommodation

Converting farm buildings to holiday lets can use Class Q permitted development. Since the Furnished Holiday Lettings regime was abolished in April 2025, holiday lets are taxed as standard residential property income.

B&B in farmhouse (up to 6 guests): Usually no change of use - remains C3 dwellinghouse
B&B in farmhouse (7+ guests): Change of use to C1 (guest house) - planning required
Converted farm buildings: Change of use from agricultural required
Class Q permitted development: Convert agricultural buildings to up to 10 dwellings and 1,000m² cumulative floorspace (each dwelling max 150m²) - rules in force since 21 May 2024
Class Q prior approval: Required - covers transport, noise, contamination, flooding, design
New build holiday accommodation: Full planning permission - strictly assessed in countryside
Holiday let restrictions: Planning may limit to holiday use only (11 months max per year)

Check Class Q eligibility: Class Q allows conversion of agricultural buildings to residential without full planning. The building must have been part of an established agricultural unit on 24 July 2023.
Apply for prior approval: Even if Class Q applies, prior approval is required. Submit to local authority with fee: £240 where no building operations are proposed, £516 where building operations are included.
Consider building regulations: Conversions require building regulations approval covering structure, fire safety, insulation, ventilation, drainage.

Permitted development for agricultural buildings (opens in a new tab)

Convert to holiday accommodation

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)

Install renewable energy

Planning permission, land classification, and financial support for farm renewables.

Equestrian and livery

Livery VAT treatment depends on services provided. Riding schools need local authority licensing.

VAT treatment of livery services depends on the type of service provided. Understanding this prevents incorrect VAT charges and HMRC enquiries.

DIY livery: VAT EXEMPT - land rental only, no services
Part livery: STANDARD-RATED (20%) - stable plus some services
Full livery: STANDARD-RATED (20%) - full care provided
Grazing only: VAT EXEMPT - agricultural land rental
Riding lessons: STANDARD-RATED (20%)
Horse hire/trekking: STANDARD-RATED (20%)

DIY livery VAT exemption conditions

DIY livery is only VAT exempt if:

You provide stable/field only - no feeding, mucking out, or exercise
The horse owner has exclusive use of their stable/field space
You provide no significant services beyond basic facilities

If you provide ANY care services (even occasional feeding when owners are away), the whole supply becomes standard-rated.

VAT on livery services (opens in a new tab)

Set up equestrian services

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 midnight
Noise limits: Maximum decibel levels at boundary
Parking provision: Minimum spaces per attendee
Traffic 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)

Set up an event venue

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.

Understand business rates

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 cover
Specialist cover: Some activities (farm tourism, events, food processing) may need specialist policies
Seasonal variations: Cover levels may need adjusting for peak seasons
Combined 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.

Review insurance requirements

Public liability minimums are higher for activities involving the public.

Funding support

Grants may be available through the Farming Investment Fund and rural development programmes.

The Farming Investment Fund helps farmers, foresters, and growers in England improve productivity, profitability, and environmental sustainability through capital grants for equipment, technology, and infrastructure.

The fund has two strands - the Farming Equipment and Technology Fund (FETF) for smaller equipment grants, and the Farming Transformation Fund for larger infrastructure projects (with themes including Improving Farm Productivity and Adding Value).

Scheme types: Farming Equipment and Technology Fund (FETF); Farming Transformation Fund (Improving Farm Productivity, Adding Value themes)
Eligibility: Farmers, foresters, growers, contractors in England
Application windows: Multiple rounds opened throughout the year
Geographic scope: England only

Farming Investment Fund (opens in a new tab)

gov.uk

Explore diversification funding (opens in a new tab)

Check eligibility for Farming Investment Fund grants and rural business support.

Access farming grants and capital funding

FETF, SSIG, and other capital grants for farm equipment, technology, and infrastructure improvements.

Diversify your farm business

Related journeys

Starting farming: complete compliance journey

Grow your retail business

Run a retail business

Form a business partnership