The CAAV has published a statement exploring the further information released by the RPA, for DEFRA, delving into the procedure for delinking payments for 2024, replacing Basic Payment in England. In the announcement, the CAAV highlighted how there is a time limitation for “any outstanding restricting of businesses claiming Basic Payment”. Applications for Basic Payment were due on May 15th, of which agreements falling within are set to end with 2023. Entitlements from this date have no function, and there is no means of transferring them.
The announcement explained how delinked payments from 2024, will be made as “personal payments” until 2027, and after this date no more payments will be made. As well as this, the CAAV highlighted how upcoming delinked payments will not be influenced by the recipient having any eligible land or carrying out any farming activity, or by the scale of land or activity is altering. Those receiving delinked payments are still able to receive other payments, and if they qualify, can apply to another DEFRA scheme.
The CAAV discussed recipients’ eligibility for delinked payments, which rely on the recipient being both eligible for Basic Payment in England in 2023, as well as them making a valid BPS claim in 2023. Although the claim must be made in 2023, the RPA has stated that the claimant is able still obtain the delinked payments from 2024 even if all connections to farming are concluded.
The assessment of the delinked payments will be carried out in the reference period of BPS 2020 to 2022 scheme years, and if no claims had been made in these three years, the recipient is not eligible for payments, unless: the business continuity rules (for example, where there had been inheritance) or there is a transfer mechanism with a reference amount to pass all/part of it to another recipient. As the 15th May has now passed, any changes in land area will not alter the arrangement. Therefore, if the recipient’s tenancy is set to expire in September 2023, the right to delinked payments will not be affected (providing an eligible claim is made in 2023). Any increase in land size after this date will also not have any effect on the size of the payments.
The CAAV stated that the RPA does not take any claims or payments in Wales, Scotland or Northern Ireland. Any reductions or penalties will be disregarded in this, and in the following situations such, but not limited to over-claim penalties, late application penalties, reductions and penalties for not meeting the greening rules, will have no affect.
In order to calculate yearly payments, the RPA will take all the payments received each year, and the figures from those years will be divided by 3, even if a payment was due in only one or two of those years. This amount will be used as a reference and will be reduced in the same way reductions have taken place since 2021. For most farmers, the reference amount will be reduced by 50 per cent, and then reduced by figures yet to be announced for the three years following 2024.
The RPA has acknowledged the circumstances where business have changed dramatically (for example, inheritance) and highlights how the reference amount should be carried forward, either in full or part, depending on the circumstances. The heir to a farmer who has died, who claimed Basic Payment in one of the years from 2020 to 2022, may request for the transfer of all or part of their reference amount, and the way in which this can be done will be set out later in the year, states the RPA. There are exceptions to the rules of inheritance: requests for transfer can only be made up to the end of 2027, the heir cannot have claimed Basic Payment in May 2023, and if an individual who inherited land before 15th May 2023, they must not have claimed Basic Payment in 2023.
The RPA also goes into detail of the specific circumstances which may arise which also fall under the classification of ‘business changes’. If a sole trader has become a partnership after May 2020, the previous reference should be automatically available, which is comparable with the situation where two or more businesses have merged to form a partnership. If the legal status has changed, a new SBI is given, through which the old SBI and its reference amount is ended.
Later on in the year, each individual with a history of Basic Payment from 2020 to 2022 will receive a statement, stating the RPA’s assessment of their reference amount in order for it to be checked. The delinked payment will be made in two yearly instalments, which are likely to be made in August and December, however this is to be confirmed. Any delinked payments will be taxed under income, however where the recipient is still farming this may fall under farming income, but otherwise would be labelled as miscellaneous income.
The outlined details and regulations that form the new operation of delinking payments, are explained to a further extent on the Gov.uk website. https://www.gov.uk/guidance/delinked-payments-replacing-the-basic-payment-scheme . The scheme rules and regulations are estimated to be put into place by the end of 2023, making 2023 the last year of England’s Basic Payment scheme.
If you are a farmer or landowner and would like to talk to one of our team members about the upcoming changes or to discuss your options, please contact your local office on:
Ashby – 01530 877977
Atherstone – 01827 721380
Rugby – 01788 564680
Towcester – 01327 397979
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Julia Trapp
Julia looks after all of our marketing communications, printed material, design, branding, publications, digital marketing and advertising. She has worked across a number of industries in marketing roles and outside of work, if usually found on a netball court or coaching from the side lines.
