Delinked payments: replacing the Basic Payment Scheme

The Rural Payments Agency (RPA) planswill to replace the Basic Payment Scheme (BPS) in England with delinked payments in 2024. The 2023 scheme year will be the last year of BPS.

The delinked payments scheme rules willare be set out in new regulations which arehave expectedbeen toapproved comeby intoParliament forceand bywill thecome endinto offorce 2023,on following1 parliamentaryJanuary approval.2024.

You will not need any land or entitlements to receive delinked payments.

RPA will pay delinked payments each year from 2024 to 2027. The amount you receive will decrease each year as we apply progressive reductions. This is explained in ‘How delinked payments are calculated’. 2027 will be the last year of delinked payments.

Check if you’re eligible for delinked payments

To receive delinked payments, you must:

• be eligible - this means you must claim,have claimed, and bebeen eligible for, BPS payments in England in the 2023 scheme year (except for some inherited land). Read the BPS rules for 2023 for information about eligibility for BPS.
• have a reference amount

Your reference amount will normally be your average BPS payment in the reference period, which is the BPS 2020 to 2022 scheme years. If you did not claim BPS in the reference period, you will only have a reference amount if BPS reference data has been transferred to you.

Your BPS 2023 claim does not need to behave been for the same amount of land, or for land in the same part of England, as you claimed in the reference period.

Your BPS 2023 claim needsneeded to be for at least 5 eligible hectares, with 5 BPS entitlements in the same BPS payment region as the land.

So long as you are eligible for delinked payments, the value of your payments for 2024 to 2027 will not be affected if your farm size changes, or if you change what the land is used for, after BPS 2022.

You can receive delinked payments even if you choose to stop farming after the BPS 2023 application deadline (15 May 2023).

You will not be eligible for delinked payments if you have received a payment under the Lump Sum Exit Scheme.

Receiving delinked payments

You will not need to apply to receive delinked payments.

Your Delinked Payments Information Statement

LaterIn thisNovember, year,or weDecember, will2023 sendwe sent a statement for you to check, showing your reference amount based on the reference data we holdheld for you at that time. We will use your reference amount when we calculate your delinked payments each year.

If you claimed BPS in any of the scheme years 2020, 2021 or 2022, but did not receive an information statement, please contact us to request one. We will then check our records to confirm if you should have received a statement and let you know the outcome.

Contact RPA by email or post as soon as possible if you do not want to receive a delinked payment.

How reference amounts are calculated

Your delinked payments will be based on a ‘reference amount’.

We use your BPS 2020, 2021 and 2022 payment information as the reference data to calculate your reference amount.

ThisYour reference amount will be the average of the BPS payments made to your business for thethese BPS 2020, 2021 and 2022 scheme years.years, Thisincluding includes any young farmer payment or greening payment.

Your reference amount will be adjusted if BPS reference data has been transferred to or from your business.

We will add up your BPS payments for the 2020, 2021 and 2022 scheme years and divide by 3. We will divide by 3 even if no BPS payment was made to you for one or more of these 3 scheme years.

We will include reductions applied for over-claiming land.

We will not include:

• over-claim penalties (which can be applied to BPS payments on top of over-claim reductions)
• reductions and penalties for not meeting the greening rules
• late application penalties
• penalties for not declaring all agricultural land parcels
• cross compliance penalties
• reductions to amounts above €150,000
• progressive reductions for BPS 2021 and BPS 2022
• amounts intercepted from your BPS 2020, 2021 or 2022 payments due to overpayments for other scheme years or other schemes

If you received a manual payment for BPS 2020, 2021 or 2022, this will be included in your reference amount.

If you also claimed BPS on entitlements in Scotland, Wales or Northern Ireland, your reference amount will be based only on the part of your payment which relates to your English entitlements. Payment schemes in Scotland, Wales or Northern Ireland will operate under the rules set by the relevant UK administration.

How delinked payments are calculated

We will apply progressive reductions when we calculate your delinked payments each year. This means the value of the delinked payments will become a smaller proportion of the reference amount each year.

Use the progressive reductions calculator to see how progressive reductions may affect your payment for the 2024 scheme year. Different progressive reductions will be applied for years 2025 to 2027 as delinked payments are gradually phased out. These reductions have not been announced yet.

We plan to make your delinked payment in 2 instalments each year - an advance payment of around 50% from 1 August with the balance payment from 1 December.

If BPS reference data was used to calculate a payment under the Lump Sum Exit Scheme, it cannot also be used to calculate a delinked payment. We will contact farmers who are affected by this.

Transferring land after the reference period

Your reference amount will not be affected if you transfer out all or some of your land after 16 May 2022 (the BPS 2022 deadline). For example, where your tenancy comes to an end soand the land goes back to the landlord. You will still need to claim,have claimed, and bebeen eligible for, BPS 2023 to receive delinked payments. To do this you will still needhave needed at least 5 hectares of eligible land and 5 BPS entitlements on 15 May 2023.

If you have used the land to claim BPS 2023, it is your responsibility to make sure the land:

• stays eligible for BPS for the rest of the year or is withdrawn from your BPS application
• meets the cross compliance rules for the whole year (unless the person you have transferred it to applied for any rural payments, in which case they take over this responsibility)

If you transfer in land after 16 May 2022, this will not increase your reference amount.

You can choose to transfer some or all of your reference amountdata to another business.

Business changes since BPS 2020

There may have been changes to the structure of your business since you were paid BPS 2020 (the first year of the reference period) which affect the delinked payments you could be eligible to receive. These changes could affect whether:

• you meet the requirement to have claimed BPS in 2023
• the BPS 2020 to 2022 payments of a previous business can be included in the calculation of your reference amount

This means you may want to ask us to transfer out some or all of your reference amountdata to a new business. The new business must have claimed, and been eligible for, BPS 2023 to receive delinked payments (except for some inherited land cases). For example, you may want to transfer some or all of your reference amountdata if your business has:

• a new Single Business Identifier (SBI)
• been merged
• been split

New business

If your business has been given a new SBI, we will normally treat it as a new business which cannot benefit from the BPS claim history of a previous business. This means we will not consider the previous business when calculating your reference amount. There are exceptions where reference amountdata has been transferred to you.

Inherited land

If you inherit eligible land in England after 15 May 2020 from a farmer who has died and who claimed BPS in one of the years from 2020 to 2022, you can ask us to transfer all or part of their reference amountdata to you. We will tell you how to do this, and the information you need to provide, laterin thisearly year.2024. You will not be able to ask us to transfer any of the reference amountdata until probate or letters of administration have been granted.

Eligible land means the same as for BPS.

If land has been inherited by more than one business, each of these businesses can ask us to transfer some of the reference amount.data. If we receive more than one request to transfer any of the reference amount,data, the transfers requested must not total more than the reference amountdata of the farmer who has died.

If you make a transfer request after we have made a delinked payment to the original business, we will take the request into account for any future delinked payments which are due. You can make a transfer request for inheritance until the end of 2027.

If you inherit the land after 15 May 2023 (the BPS 2023 application deadline), you do not need to have claimed BPS in 2023. If you inherit land with a sitting tenant before 15 May 2023 and the land was still let to the tenant on 15 May 2023, you do not need to have claimed BPS in 2023.

If a sole trader dies and an executor or administrator has been appointed, this will be treated as the same business. Any delinked payments due will be paid once RPA has been sent a grant of probate or letters of administration.

Becoming a partnership

If the business status of a sole trader has changed to a partnership since BPS 2020, we treat this as the same business and the SBI should be the same. This means the partnership can use the BPS claim history of the sole trader for delinked payments.

If 2 or more businesses merged to form a partnership, reference amountsdata from the previous businesses can be transferred to the new partnership’s SBI.

Other changes to the legal status or ownership of your business

If there has been a change to the legal status or ownership of your business, you may have been given a new SBI. For example, this may be the case if a partnership has become a limited company. If you have been given a new SBI, we will normally treat it as a new business which cannot benefit from the BPS claim history of a previous business. This means we will not consider the previous business when calculating your reference amount. There are exceptions where some or all of the reference amountdata is transferred to you.

Business structure changes after 15 May 2023

If your business structure changes after 15 May 2023 (the BPS 2023 application deadline), we will still make the delinked payment to the SBI which claimed BPS 2023 (except for some inherited land cases).

You should complete an IACS 26 or IACS 27 form if you are claiming, or planning to claim, under our other schemes.

You can change the bank account we use to pay you at any time. YouTo shouldchange completeyour anbank IACSaccount, 26call or03000 IACS200 27301, formMonday ifto youFriday, are8:30am claiming, or planning to claim,5pm, underexcept ourbank other schemes.holidays.

When you can transfer out your reference amountdata to another business

The ‘reference data’ is the BPS 2020 to 2022 payments (before some reductions and penalties). The ‘reference amount’ is the sum of the reference data divided by 3.

You can transfer all or part of your reference amountdata (used to calculate your reference amount) to another business or businesses. For example, you might want to do this if, since BPS 2020, your business has merged or split, your SBI has changed or you have passed some or all of your farm to someone else. There are special rules for inherited land.

ToYou transfer your reference amount, you will need to tell us how much of your BPS 2020 to 2022 reference data you want to transfer. You will be able to do this during a transfer period in early 2024. We will tell you how to do this laterbefore this year.

The ‘reference data’ is the BPStransfer 2020period to 2022 payments (before some reductions and penalties). The ‘reference amount’ is the sum of the reference data divided by 3.opens.