Basic Payment Scheme - Lump sum payment & exit plus delinking

Basic Payment Scheme - Lump sum payment & exit plus delinking

Posted on Mon, 24/05/2021 - 15:12
BPS delinking and lump sum payment update

A consultation has been released on the governments proposals for delinking the basic payment scheme and also for taking a lump sum and exiting out of the industry. 

If you would like to provide views on the proposals complete the survey here

 

In summary: 

Delinking

Direct payments phased out 2021 – 2027

Delink from 2024. After this payments based on a reference period for 2024 - 2027. Reference period likely to be 2018 – 2020.

Progressive reductions will be made to this reference amount. There will be no requirement to continue farming, however there will be a requirement to still be farming at the end of the reference period 2023. No impact on sum paid if expand or reduce farm size after 2024.

Sustainable Farming Incentive starts March 2022 to recipients of BPS. Starting with core sustainable farming actions building with time.

Local Nature Recovery and Landscape Recovery schemes to come in 2024

During transition there will be the opportunity to acquire grants to invest in equipment, technology and infrastructure that will improve efficiency and productivity whilst benefiting the climate and environment.

Government are reviewing how to continue cross compliance/regulation  

 

Lump Sum & Exit

Lump sum option 2022 (not available in later years)

No partial lump sum option i.e. all or nothing. 

BPS entitlements held will be cancelled

The farming business will not be able to claim any further direct payments

Where the entity is a limited company there is the proposal that directors will also be unable to claim future direct payments. Where a business is a partnership all partners will be unable to claim future direct payments. Should any apply for CSS or Sustainable Farming Incentive in the future the lump sum will have to be repaid.

No restriction on becoming contractors or working for other farmers

To be eligible land must be surrendered:

Owner/occupier to sell or rent out (if renting out must be on an FBT minimum term of 5 years)

Tenant surrender their AHA or FBT tenancies

A time frame will be set in which land must be surrendered.

To prevent recent entrants receiving a lump sum the proposal is that you must have claimed in 2015 to be eligible (with the exemption if you have inherited or succeeded an AHA).

Lump sum to be calculated on reference period, 2.35 times the reference amount. With a cap at £100,000.

Reference period to be either a single year or average of a number of years. Average thought to be fairest calculation, averaging 3 years 2018 – 2020.

No rules on what the lump sum can be spent on.

BPS delinking & lump sum payment update

Final details to be released by 31st October 2021.

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