Low Hunsley Farm, Little Weighton - The gathering cloud of inheritance tax

Since just before taking over the farm from his father in 2016 Dave and Rachel have diversified into a livery yard and then holiday cottages and have recently taken up on the government’s now iced SFI scheme.

“The farm runs to 330 acres,” says Dave. “This was a mixed farm when I was growing up, made up of cattle, sheep and arable crops. It’s now all arable and grass. We grow wheat and grass and rent out land to other farmers for potatoes and peas. I have 140 acres of Siskin winter wheat this year with most ending up in the Vivergo plant in Hull. I had 240 acres of wheat last year, but we got in early on with the SFI schemes through our daughter Lucy, who put in all the work, and we currently have 70-plus acres on a rotational SFI agreement.

“Our wheat averages between 3 to 3.25 tonnes per acre on traditional Wolds land where we haven’t much more than 12 inches of soil, which drains well. I’m still ploughing and still have my own a combine, a second hand Claas Tucano. We have been in stewardship schemes previously, but we haven’t gone into them as much in depth previously as we have with the new SFI scheme.

Dave explains his reasoning for putting far more land into SFI.

“It was the Basic Farm Payment coming off that led us to this because it is guaranteed money, but in addition our last harvest’s crop establishment was absolutely dreadful, as it was for most farmers. I was one of those who got drilled up, and got everything sprayed with pre-emergence, but the next day it turned absolutely torrential and it washed a lot of chemicals away which meant the crop was an absolute disaster.

Keeping heads above water and keeping the farm going has always been Dave and Rachel’s priority.

“I said to Rachel many a time that if the farm started breaking into the BPS payments for us to make a living it was a time that we needed to do something else, and it did get to that point.

“So, the first thing we did was build a livery yard at the top of the farm in 2013 when my father was still alive. The idea was that if anything went wrong with our other bright ideas at least there was something that might get us out of trouble. We started with nine stables on part-assisted livery, now we have 23 having converted old cattle buildings into stables and it’s all full livery. We also have two arenas and five miles of hacking tracks around the perimeter of the farm where people can ride in safety without going over roads.

“We started with holiday cottages in 2019,” says Rachel. “We have six cottages, of which two have hot-tubs, and they’re doing very well. At the minute we have four rented out Monday to Friday to people working down at new Amazon factory at Melton.

“We get quite a lot of our weekend trade from people visiting family, coming over for special events like weddings and we work with Little Wold Vineyard and The Manor Rooms at Drewton. We also get a lot of visitors who enjoy walking because we have access to The Wolds Way here and we’re popular with those who visit nature reserves at North Cave, Spurn or Bempton, and of course Beverley is a big draw for a lot of people.

Rachel has worked for the NFU for 35 years and is currently employed by NFU Mutual for the Driffield, Howden & Pocklington agency with her work concentrated on farms. As such she sees how the government’s announcements, notably on Inheritance Tax and agricultural property relief, and now the drawbridge being raised up on the SFI schemes are affecting all farmers.

“It has always been the advice of accountants to keep the land because it would pass over to the next generation Inheritance Tax free but now some farmers, say in their late 80s, are being affected badly.

“They’ve been thinking they have done the right thing and now it’s touch and go whether some will last seven years, purely because of nature, if they have been looking at the gifting side.

“Farmers are being so stressed out at a time of their life when they will certainly be more vulnerable and it is affecting their wellbeing because they are suddenly thinking what am I going to do? Can I afford to keep the farm?

“Some are thinking ‘I need to die before next April.’ There really are quite a lot of farmers out there thinking that way. You’ve also got farmers where, in order to look after the family, the farm has to be split multiple ways or has to go to one of the family with a pay-out for the others.

“If this goes ahead farmers are now going to have to borrow money to pay out family members to keep farming and now also borrow money to pay this tax. In nearly every circumstance this is not doable.

“We’re getting a lot of interest from people wanting to give themselves seven years to gift the land across, and a lot wanting to take out life assurance to ensure the money is there to pay off this impending tax debt or at very least reduce it for their next generation, but if you’re in your 70s life assurance isn’t cheap.

“There is also an element of those who have their heads in the sand hoping this government won’t be in power in five years and all this will get reversed.

Dave is in no doubt over what may happen to their farm if the Chancellor’s proposals are not changed.

“We are in danger of losing the farm through Inheritance Tax. If the girls take over what we have currently there’s no way they can make the farm work without having to sell a lump off. Lucy works for DDM as a trainee land agent and Sarah is at Bishop Burton College. They’re both keen.

Rachel has been one of those behind the Humber Bridge Tractor Run protest on the Day of Unity, when 75 tractors drove across the bridge; and has been talking to the public at supermarkets in Beverley, Willerby, Hornsea and Anlaby.

“We’ve had a good response. Most people have said keep it up, we need rid of this lot.