Agricultural Payments Update
- Lump Sum Exit Scheme – application details announced
- Delinked Payments from 2024 – more information available
- 2022 BPS Entitlement Transfer Window NOW OPEN
- Countryside Stewardship Applications for 2022 NOW OPEN
The RPA have provided further detail on two previously announced aspects of the Agricultural Transition – the Lump Sum Exit Scheme and Delinked Payments.
Additionally, the 2022 BPS Entitlement Transfer Window and applications for Countryside Stewardship Agreements starting on 1st January 2023 are NOW OPEN.
Lump Sum Exit Scheme
This scheme is for those wishing to leave farming, offering a one-off payment to those who become eligible by:
- surrendering their BPS entitlements to the RPA
- transferring the agricultural land ‘at their disposal’ on 17th May 2021 out of their control by*:
- selling or gifting the land to the next generation or a third party
- letting owned land under a Farm Business Tenancy with a term of at least 5 years
- where land is rented; ending or assigning the tenancy or completing a succession.
*Parties may keep the Farmhouse and any other non-agricultural property, land that is ineligible for BPS, up to 5 ha of agricultural land and any land entered into a woodland creation scheme.
The payment received will be the average of BPS receipts between 2019 and 2021, capped at £42,500, multiplied by 2.35. This will be paid once the RPA receive evidence of the applicant completing the above criteria, with applicants given until 31st May 2024 to do so.
The RPA anticipate that the Lump Sum Exit Scheme payments will be subject to Capital Gains Tax, or Corporation Tax, as applicable, with existing capital gains reliefs available where the qualifying criteria are met.
Prospective scheme participants are encouraged to still apply for BPS in 2022 and 2023, protecting their position should they fail to meet the criteria for the scheme, with any BPS receipts subsequently deducted from the lump sum payments made to qualifying applicants.
It should be noted that Lump Sum Exit Scheme participants will no longer be eligible to receive BPS payments after 2024, to continue any Countryside Stewardship Agreements (these should be transferred to those taking on the land), or to enter any Environmental Land Management Scheme agreements.
Those interested in applying to the Lump Sum Exit Scheme should first seek a ‘Forecast Statement’ from the RPA, which will show the payment available, and help prospective applicants decide if they want to apply when the Scheme opens with a one-off application window in April 2022.
The Lump Sum Exit Scheme Timetable
| Now | Request a forecast statement |
| April 2022 | Applications for the Lump Sum Exit Scheme open |
| April/May 2022 | Apply for BPS in 2022 as normal |
| 30 September 2022 | Applications for the Lump Sum Exit Scheme close |
| November 2022 | Lump Sum Exit Scheme Payments begin to those who have: surrendered BPS entitlements to RPAtransferred agricultural land that was ‘at their disposal’ on 17th May 2021 |
| 31 May 2024 | To qualify for payment, the latest date by which Lump Sum Exit Scheme applicants must have surrendered BPS entitlements to RPAtransferred agricultural land that was ‘at their disposal’ on 17th May 2021 |
If the Lump Sum Exit Scheme is of interest to you, please do not hesitate to contact a member of the team to discuss further.
Delinked payments
For those not entering the Lump Sum Payment Scheme, the RPA have provided further clarity on BPS payments from 2024 onwards.
From 2024, all BPS payments will become ‘Delinked Payments’, meaning land and entitlements will not be required to make a claim. This means those who stop farming can still receive payments, providing an alternative for those leaving farming, who do not qualify for the Lump Sum Exit Scheme.
Annual payments will be based on the average BPS payments received between 2020 and 2022, though subject to continuing progressive reductions, and will still be treated as income, like BPS payments, for taxation purposes.
Entitlement Transfer Window
The window to transfer BPS Entitlements has now opened, with trading possible until the BPS application deadline on 16th May 2022.
If you anticipate requiring additional entitlements this year, or have some available to sell, please do let a member of the team know.
Countryside Stewardship Applications
The application window for Countryside Stewardship Agreements commencing on 1st January 2023 opened this week and will remain open until 29th July 2022.
If you are interested in applying for an agreement but would like some guidance on the best options and capital items for your land, any member of the team would be happy to help.
