The Government has today published guidance on how the lump sum exit scheme will work. The lump sum will be based on the average BPS payments made to the farming business for the 2019 to 2021 scheme years – the reference amount – multiplied by 2.35 but capped at a maximum payment of £99,875. The Government has provided a facility to request a forecast statement of the amount of the lump sum payment that may be made to any claimant.
In order to qualify for the exit payment, the business must have claimed BPS in the 2018 (or earlier) claim year, BPS entitlements will have to be surrendered and the land that was used to activate the 2021 BPS claim (plus any rights of common) must be transferred to another business by 31 May 2024. That deadline can be extended by agreement in certain limited circumstances.
Farmers will be able to retain houses and other non-agricultural land and also any land that they plant with trees under a woodland creation scheme.
In response to the consultation comments, rules have also been introduced that will make it possible for some partners or directors to retire from farming and receive the lump sum payment whilst allowing other partners or directors to continue. The business will, however, still have to surrender the BPS entitlements as a precondition of the lump sum payment being made. These rules are aimed at facilitating succession for both owner occupiers and tenants.
Further guidance around the application procedure is still awaited but it has been announced that it is expected that farmers will be able to apply from April 2022 until the end of September 2022 and that payments will start to be made from November 2022.
Please contact us if you would like more information.