The Lump Sum Exit Scheme was for BPS applicants in England who wished to leave farming, either to retire or take up a different occupation. Agricultural land, BPS entitlements and business activity in Northern Ireland, Scotland and Wales were not affected.
This was a one-off opportunity.
For those that have applied for the Lump Sum Exit Scheme, and wish to fulfil the requirements of the scheme, they need to ensure they follow the scheme rules and timelines.
Under the scheme, once a lump sum exit payment is made, you will no longer be eligible for BPS payments or delinked payments (which will begin in 2024) in England.
Claiming the lump sum amount
For those who intend to claim their payment, please remember that there is still the need to complete, with the help of a suitable agricultural valuer or a solicitor, the Lump Sum Exit Scheme entitlements and evidence form and submit it to the RPA.
This form, which includes a certificate, needs to be completed and submitted to the RPA by midnight on 31 May 2024.
Applying for BPS in 2023
Those that applied for the Lump Sum Exit Scheme may not be in a position to submit the entitlements and evidence form and may, as a result, still be eligible to claim BPS in 2023.
Such farmers may want to apply for BPS in 2023, even though they have already applied for the Lump Sum Exit Scheme. This would protect the exiting farmer if they later are not eligible for the lump sum or cannot complete the disposal of land in time.
To apply for BPS in 2023, a farmer still needs to meet the BPS scheme rules, which include having eligible land at their disposal, and hold BPS entitlements on 15 May 2023.
If the farmer receives the BPS 2023 payment and later meets the rules of the Lump Sum Exit Scheme, the value of any BPS payments made will be deducted from the lump sum due.
Visit the Defra website for more guidance on the scheme and information about eligibility: Lump sum payments for farmers who leave or retire from farming, and delinked payments
Connection to delinked payments
If a farmer does not want to receive the lump sum exit payment but instead wants to receive delinked payments for 2024 to 2027 (which replace BPS), they need to submit a BPS 2023 application.
They must claim, and be eligible for, BPS payments in the 2023 scheme year to receive delinked payments. They must also meet the other rules for delinked payments, which will be published during 2023.
Withdrawing a Lump Sum Exit Scheme application
If a farmer does not want to receive the lump sum exit payment due to wanting a delinked payment instead, or cannot fulfil the requirements of the scheme, they can withdraw their application at any time until they have been paid the lump sum.
Withdrawing the application can be done via the Rural Payments online service or by writing to the RPA. If using the latter approach, the email subject heading should state ‘Lump Sum Exit Scheme: withdraw Lump Sum application’ and providing the SBI number.
Defra's Future Farming Resilience Fund
To help farmers through the transition away from Direct Payments, currently paid as BPS, Defra has created the Future Farming Resilience Fund (FFRF) offering free and confidential business advice open to any farm currently in receipt of direct payments. Find out about the support available under Defra's Future Farming Resilience Fund.
How the NFU can help you
Members requiring legal advice on the Lump Sum Exit Scheme payment or broader succession planning will be entitled to take advantage of the NFU Legal Health Check service which is delivered through our Legal Panel Firms.
The service (available to all Farmer & Grower members) aims to help identify any concerns, gaps or other legal matters members need to address to help secure their farming, growing and diversified businesses.
It can also significantly help underpin business resilience during these uncertain times. It covers various topics including estate planning, reviewing business structures, lasting powers of attorney, partnership agreements, succession planning and many more.
It can also be used by members on general plans for the future implementation of Defra’s post CAP support framework under the Agricultural Transition Plan and ELMs.
In addition, all Farmer & Grower members who subscribe to the LAS (Legal Assistance Scheme) can apply for financial assistance of up to a maximum of £1000 for four sets of instructions (at £250 each) generated by the Legal Health Check carried out by the NFU Legal Panel Firms.
We hope members will take advantage of this service to determine whether it is possible and how to gain access to these payments in support of their families and businesses.
The NFU's advisers have put together a summary of the Lump Sum Exit Scheme. It covers:
- scheme rules
- application and claim process
- timeline summary