Suffolk farmer says diversification “saved” business as inheritance tax pressures continue
Changes to the inheritance tax are now in place
A Suffolk farmer says diversifying into events and hospitality has helped secure the future of her business, and feels this will be vital for other farms to survive as pressures on the farming industry continue to grow.
Katie Haywood-Farmer, from All Manor of Events near Ipswich, said expanding beyond traditional farming became necessary to generate income.
She said: “We needed to find a source of income. Farming is unfortunately not what it used to be and in order to pay the inheritance tax, there needed to be an alternative source of income for the farm.”
Diversification ‘a necessity’
Haywood-Farmer said the move reflects a wider challenge across the sector, with some farms increasingly reliant on additional income streams to remain viable.
She said: “Farming is unfortunately not what it used to be.”
Her business now combines farming with events and accommodation, part of a growing trend of diversification across rural economies.
Long-standing inheritance tax burden
Haywood-Farmer said her own experience highlights the long-term financial pressures facing farming families.
Her mother died in 2004, and she said the inheritance tax linked to the farm has remained a burden ever since.
She said: “It’s a very sad myth that farmers don’t pay inheritance tax. I will, unfortunately, never be able to pay it off in my lifetime - The inheritance tax that is owed on the farm.”
She believes recent changes to inheritance tax rules could leave other farming families in an even more difficult position than she faced at the time.
Concerns over recent changes
Her comments come amid changes to agricultural property relief, which have prompted debate across the industry.
The Government says reforms are designed to make the system fairer and support public finances.
However, Haywood-Farmer said the impact on farms could be severe.
She said, “It should never have happened. It’s going to cause a huge amount of problems for a lot of families.”
‘Teetering on unviable’
She warned that many farms are already operating on tight margins, with some at risk without additional income streams.
She said: “To add this tax is just going to make farming so unviable for a lot of families.”
She added: “Back in the 70s and 80s, farming was a really great business to be in… but nowadays, it’s teetering on unviable for an awful lot of farms.”
Despite the challenges, she said farming remains driven by passion.
“The majority of farmers do farming because they love it. It’s a way of life.”
Looking ahead
Haywood-Farmer said diversification has been key to sustaining her own business, but warned not all farms will be able to adapt in the same way.
She said the industry is facing increasing pressure, with financial and policy changes shaping its future.
Government response
A spokesperson for the Department for Environment, Food & Rural Affairs said, “We’re backing British farmers as part of a new era of partnership to create a productive, profitable and sustainable future for farming.
“We’ve listened to farmers and business owners across the country and have made changes to inheritance tax relief to protect more family farms.
“This is alongside delivering the largest nature-friendly farming budget in history, protecting farmers in trade deals, and making supply chains fairer to help secure the farming sector’s future and boost profitability.”
Background:
• We’ve increased the individual threshold from £1 million to £2.5 million.
• Couples with estates of up to £5m will now pay no inheritance tax on their estates. The allowance will be transferable between spouses and civil partners.
• It will also apply to widowers who have lost spouses or civil partners before the policy is introduced.
• This will halve the number of estates claiming Agricultural Property Relief (including those also claiming Business Property Relief) affected by the reforms, better targeting the relief.