Farmers diversifying their businesses are identifying inventive ways of increasing their income streams without being required to carry out too much extra work.
Over the past five years, there has been an increase in the number of farmers across Cumbria adding new strands to their business as a way of significantly boosting their revenues.
Renting their land out for camping pitches during peak summer months, creating car parking spaces for nearby festivals and events, and introducing camping and glamping accommodation are examples of inexpensive and largely hassle free business ventures popular among agricultural businesses.
Since the outbreak of Covid-19 in 2020, Will Robinson, an account manager at chartered accountants Saint & Co, has provided financial assistance to more than 20 farming clients diversifying their business as an effective strategy of earning extra income via such ‘quick win’ ventures.
He said: “There has definitely been a spike in the past five years of farmers, especially the younger generation, who are reviewing their assets and looking at making as much money from what they have.
“Farmers are certainly becoming more market savvy and where there’s opportunities to add income without having to do any extra work, it makes sense to make the most of their land.
“Examples of diversification I have been involved in include farmers charging £5 a night to camp on their vacant land, and converting their barns into bed and breakfast accommodation.
“One client made a withdrawal from his investment portfolio to invest in some camping pods, and these are bringing in more annual income than his investment would have so it has been a very shrewd business investment.
“These are great examples of how farmers are identifying that we live in an area really popular with tourists, so making their land accessible to visitors can be a quick win and boost their income quite substantially.
“I have worked with many farmers to analyse tax implications associated with the diversification of their business to ensure it’s financially worthwhile pursuing, and what I find is that it usually is. Most farms already have public liability insurance and, while there may be a little extra insurance required, these ventures are largely inexpensive to the business and involve little to no extra work to implement.”
Will manages Saint & Co’s Wigton office and works with agricultural and businesses of all sizes across Cumbria.
He said: “There are a lot of important factors to consider when thinking about diversifying the business, especially around VAT and Family Income Tax. It’s key that the tax and all financial implications are taken into account to make sure the venture will work out before they take that first step.”
