Delinked payments: replacing the Basic Payment Scheme

The Rural Payments Agency (RPA) is replacing the Basic Payment Scheme (BPS) in England with delinked payments in 2024. The 2023 scheme year was the last year of BPS.

The delinked payments scheme rules are set out in new regulations which came into force on 1 January 2024.

You will not need:

• any land or entitlements to receive delinked payments

• to apply to receive delinked payments, in 2024 or later years

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 have claimed, and been eligible for, BPS payments in England in the 2023 scheme year (or inherited eligible land after 15 May 2023). 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.

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

• you change what the land is used for, after BPS 2022 (the last year of the reference period).

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.

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.

Your reference amount will be the average of the BPS payments made to your business for these scheme years, including any young farmer payment or greening payment.

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 in 1 or 2 of these 3 scheme years.

Your reference amount will be adjusted if:

• your BPS reference data is amended as a result of further RPA checks, such as following a BPS payment query or appeal you have submitted for any of the reference years, 2020, 2021 or 2022

• BPS reference data has been transferred to or from your business

You are able to view your reference data in the Rural Payments service, in the ‘View and transfer reference data’ section of the relevant business.

The reference data will take account of any:

• manual payments for BPS 2020, 2021 or 2022

• reductions applied for over-claiming land

The reference data will not take account of:

• 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 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.

Your delinked payments information statement

In November, or December, 2023 we sent a statement for you to check, showing your reference amount based on the reference data we held for you at that time. We will use your reference amount when we calculate your delinked payments each year, if you are eligible.

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.

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.

Your delinked payment each year =

your reference amount - progressive reductions for that year

The progressive reductions work in payment bands, on a sliding scale, like income tax bands. This means higher reductions will be applied to amounts in higher payment bands.

For 2024,2025, we willplan to reduce delinked payments by the percentages in the following table. These percentages will be set in new regulations, which are expected to come into force by the end of July 2025, following parliamentary approval.

Payment band	Reduction percentage applied to 20242025 payment
£30,000 or less	5076
Amounts above £30,000 and no more than £50,000	55100
Amounts above £50,000 and no more than £150,000	65
Amounts above £150,000	70

For example, a reference amount of £40,000 would have a 50%76% reduction applied to the first £30,000 of the payment (a reduction of £15,000).£22,800). A 55%100% reduction would be applied to the next £10,000 (a reduction of £5,500).£10,000). The payment would be reduced by £20,500£32,800 to £19,500.£7,200.

UseYou can use the delinked payments calculator to see how progressive reductions maywere affectapplied to your payment for the 2024 scheme year. We will update the calculator for the 2025 scheme year. The progressive reductions for 20252026 to 2027 have not been announced yet.

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.

Transferring land after the reference period

Your reference amount will not be affected if you transfer out some or all of your land after 16 May 2022 (the BPS 2022 deadline). For example, where your tenancy comes to an end and the land goes back to the landlord. You will still need to have claimed, and been eligible for, BPS 2023 to receive delinked payments.

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

Receiving delinked payments

You will not need to apply to receive delinked payments.

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

However, for 2024 delinked payments, the second instalment will now be made from 30 September, rather than from December, to help farmers with their cashflow following the impact of wet weather.

You will receive remittance advice and a payment statement for each payment instalment each year. The payment statement will show the value of your total annual delinked payment for the relevant year as well as what you’ve been paid in that instalment.

Remittance advice will be posted. Customers with a valid business email address will receive an email with a link to their statement. Those customers that we need to post statements to will receive printed copies.

Please contact RPA by email or post as soon as possible if you do not want to receive delinked payments.

Overpayments

If we need to recover overpayments from you, we may add interest to the amount recovered. This will be the Bank of England base rate plus 1%.

Tax treatment for delinked payments

Where a business receives delinked payments, these will be taxed as ‘income’.

Business changes since BPS 2020

As there may have been changes to your business since you were paid BPS 2020 (the first year of the reference period), we gave you the option to transfer out some or all of your reference amount to another business. For example, you might have wanted to do this if your business has merged, split or been given a new SBI since BPS 2020. You could do this during a transfer period from 15 February to 10 May 2024.

The only circumstances in which you can now request to transfer a reference amount, is if you have inherited eligible land after 15 May 2023.

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 payments to the SBI which claimed BPS 2023 (except for some cases where land has been inherited after 15 May 2023).

You should complete an IACS 26 or IACS 27 (Business Questionnaire) form if you are claiming, or planning to claim, under our other schemes. If RPA issue you with a new SBI, that will be used for future payments under other schemes. The delinked payments will continue to be made to the bank account linked to the SBI which claimed BPS 2023.

You can change the bank account we use to pay you at any time. For example, if a partnership ends or a limited company is wound up after it claimed BPS 2023, you can change the bank account that is linked to that SBI. We will then pay any delinked payments to that bank account. The bank account does not need to match the original trading name of the business.

To change your bank account, call 03000 200 301, Monday to Friday, 8:30am to 5pm, except bank holidays.

Inherited land

If you inherit eligible land in England after 15 May 2020 from a farmer who had a reference amount, you can ask us to transfer all or part of that amount to you. If a tenant has died and their beneficiary takes on their tenancy, we will treat this as an inheritance of eligible land. You will not be able to ask us to transfer any of the reference data until probate or letters of administration have been granted and the estate has been settled.

Eligible land means the same as for BPS.

If you are the sole inheritor of the land, you can ask us to transfer all the reference datadata. from the farmer who has died. If land has been inherited by more than one person, each person can ask us to transfer some of the deceased person’s reference data. A separate Delinked Payments Transfer Request form will need to be submitted for each business. Where possible, you should all agree how you want the reference data to be split between you, before you make your transfer requests. The total sum of the reference data on the transfer requests cannot be more than the total reference data 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 do not need to have claimed BPS in 2023, if you inherit eligible land:

• after 15 May 2023 (the BPS 2023 application deadline)

• with a sitting tenant before 15 May 2023 and the land was still let to the tenant on 15 May 2023

If, before delinked payments end, a sole trader dies and an executor or administrator is appointed, this will be treated as the same business. RPA willbusiness. The executor or administrator, or their representative, will need to besend sentus a grant of probate or letters of administration tobefore bewe ablecan to pay any delinked payments due.

We will then continue to pay the deceased person’s business until the estate is settled. Once the estate is settled, the inheritors of the land can ask RPA to transfer reference data to their business. They will need to make this transfer request before 31 December 2027.

If someone who is eligible for delinked payments dies, but the beneficiaries of the estate do not inherit any eligible land, the Executors can ask us to keep the deceased person’s SBI open. Once probate is granted, we will then continue to pay any further delinked payments to that SBI.

Read information about what to do if a customer registered with the Rural Payments service dies.

Transfer a reference amount to another business when you have inherited land

If you inherit eligible land in England after 15 May 2020 from a farmer who has died and who has a reference amount, you can ask us to transfer all or part of that amount to you.

We will process this by transferring reference data and you will need to tell us how much reference data you want to transfer.

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

How to make your transfer request

Complete a Delinked Payments Transfer Request form. We will accept the request until 31 December 2027.

Invalid transfers

If reference data is transferred to you that should not have been, you will lose that reference data. For example, this could be the case if we find an error with the BPS 2020, 2021 or 2022 reference data after the transfer has been made.

Applying for other schemes

You can also apply for any other scheme you are eligible for. If you’re a farmer, land manager or forester, read Funding for farmers, growers and land managers for information about opportunities to apply for money to improve the environment and your farm’s productivity. You can keep up to date with scheme news by reading the Rural Payments Agency website and the Defra Farming blog.

If you claim under our other land-based schemes, you should keep your land information up to date by checking your digital maps in the Rural Payments service. Not doing so could affect your payments under any existing schemes you are part of and future schemes you enter into.

Appeals

For information about how to appeal against a decision we make about your delinked payments, and the deadlines that apply, read our Complaints procedure.

Prevent financial fraud against your business

You need to be aware of financial fraud and take measures to prevent it.

Contact RPA

Email: ruralpayments@defra.gov.uk and put ‘Delinked payments’ in the Subject heading.

Telephone: 03000 200 301