Delinked payments are how the RPA in England will continue issuing direct payments between 2024 and 2027. They replaced BPS, which ended in 2023.
In November 2023, initial communications were circulated explaining the transition from BPS to the Delinked Payment process. These included the initial calculations for a business’ reference amount and what the delinked payment amount would be, based on this figure.
Like BPS, these payments will continue to be subjected to progressive reductions until 2027; the payment rates have been confirmed for 2024.
To receive delinked payments, you must:
- Be eligible – this means you must claim, and be eligible for, BPS payments in England in the 2023 scheme year (note there is an exception for some inherited land situations).
- Have a reference amount.
The reference amount will normally be the average BPS payment in the reference period, which is the BPS 2020 to 2022 scheme years. If you did claim in 2023, but did not claim BPS in the reference period, you will only have a reference amount if BPS reference data has been transferred to you.
As 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 16 May 2022, the BPS 2022 application deadline (the last year of the reference period).
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 transferred in land after 16 May 2022, this will not increase your reference amount.
You will not be eligible for delinked payments if you have received a payment under the Lump Sum Exit Scheme.
This move to delinked payments only applied in England and to English-based BPS claims.
There was a letter explaining the process for new BPS claimants in 2023, and how you will be impacted by the transfer window.
Information on related direct payment activity:
- Read more about the Lump Sum Exit Scheme on our web page: Find out more about the Lump Sum Exit Scheme
BPS query and appeals deadline
If you wanted to query the figures presented with the information statement you had until 29 February 2024 to challenge them, unless the information was communicated to you after 1 January 2024, in which case there will be 60 days from the date of communication to challenge or query the figures.
Reference data and reference amount – what do they mean?
It's important to understand the terms that the RPA use in connection to delinked payments. These include:
Reference Data: This is the adjusted payment for your BPS claims from 2020, 2021 and 2022.
Reference Amount: This is the average of your adjusted BPS claims from 2020, 2021 and 2022 and used as the basis on which a delinked payment is made, following the application of progressive reductions to your reference amount.
Reference Period: The reference period is the BPS 2020 to 2022 scheme years. If you did not claim BPS during this period, you will only have a reference amount if BPS reference data has been transferred to you.
Transferred Reference Data: This is when you have to transfer your reference data to another business with a different SBI.
Latest news
Post Budget developments
Following the Autumn Budget on 30 October, Defra released the following information on the position of delinked payments for the 2025 scheme year:
Delinked payments
- Defra will prioritise directing investment to ELM schemes to boost nature and sustainable food production.
- Defra will accelerate the end of the era of payouts to large and wealthy landowners simply for owning land, with reductions applied in payment bands on a sliding scale – like income tax bands.
- The fastest reductions in subsidies will be to those who historically received the largest payments – for example the 4% who received more than £100,000 in subsidies in 2020 next year will receive no more than £7,200 in 2025, whereas for the majority of farmers who received less than £10k to start with, they will continue to see a gradual reduction in their delinked payments but will have ongoing access to funding through SFI and other schemes.
- Delinked payments have always been planned to be progressively reduced through to 2027. In 2024, reductions were 50% for the lowest payment band, increasing to 70% for amounts in the highest payment band
- For 2025, Defra plans to apply a 76% reduction to the first £30,000 of a payment, while making no payments for any portion of a payment above £30,000.
- For example, a payment of £40,000 would have a 76% reduction applied to the first £30,000 of the payment (a reduction of £22,800).
- A 100% reduction would be applied to the next £10,000 (a reduction of £10,000). The payment would be reduced by £32,800 to £7,200.
NFU comment
The level of progressive reductions for 2025 needed to be made by the government in power as they entered into 2025.
These proposed reduction rates, as set out above, of 76% for the first £30,000 of a delinked payment and 100% of delinked payments above £30,000, will need to be approved by the parliamentary process in early 2025 before being confirmed. This has been the case for the reductions applied to BPS in 2021, 2022 and 2023 and delinked payments in 2024.
There has been no indication given as to the progressive reduction rates beyond 2025.
Payment statements
Payment statements were initially intended to be circulated to recipients of delinked payments at the same time payments were made.
However, due to circumstances outside the RPA’s control, payments were delayed in 2024. What you should have received was the remittance advice.
The payment statements will outline the amount paid in each instalment of delinked payment. It is currently unclear when these statements will be circulated, but they will be important to keep for your farm records.
Outstanding payments
While most recipients have been paid for their 2024 delinked payments, there may still be those waiting on a payment due to inheritance matters or some other matter.
As a reminder, there are no scheduled delinked payments for December 2024 due to the December payment being brought forward and issued from 30 September; there is no further delinked payment for 2024.
The next payments will now be made in 2025.
Those with payments awaiting confirmation will still be paid on a case-by-case basis once any probate or other issues are resolved. Read: 6 key steps to prepare for delinked payments.
Second payment brought forward
On 24 May, the government announced that it was bringing forward the second instalment of 2024’s delinked payment, which will now be paid from 30 September 2024, acknowledging the challenges to cash flow following the impact of wet weather. This will follow the first instalment, which is due to be paid from 1 August 2024.
There will not, therefore, be a December payment in 2024 for delinked payments.
Confirmed reductions
For 2024, the confirmed reductions to delinked payments by the percentages are in the following table:
| Payment band | Reduction percentage applied to 2024 payment |
| £30,000 or less | 50 |
| Amounts above £30,000 and no more than £50,000 | 55 |
| Amounts above £50,000 and no more than £150,000 | 65 |
| Amounts above £150,000 | 70 |
In terms of how the reductions will operate in 2024, if a farmer has a reference amount of £40,000, this would be subject to a 50% reduction applied to the first £30,000 of the payment (a reduction of £15,000) and a 55% reduction would be applied to the next £10,000 (a reduction of £5,500). The payment would be reduced by £20,500 to £19,500 from the reference amount.
Transfer window
The transfer window for delinked payments, which went live on 15 February 2024, closed on 10 May 2024.
This was the only opportunity for businesses to transfer their reference values between one another, while in cases of inheritance with land, a transfer can take place until 2027.
The transfer window involved an online or paper form process to submit a transfer request. Which method you use depended on the type of transfer/situation you are involved in.
A new version of the paper form remains in use for inherited land cases.
Delinked payments – an overview
Defra has replaced the current BPS in its entirety (including the young farmer payment) for all farmers for the remaining years of the agricultural transition. Delinking will not be optional if you want to continue to receive direct payments. However, you can withdraw from receiving them altogether by contacting the RPA.
You will not need to apply to receive delinked payments.
In November and December 2023, the RPA circulated information statements. This outlined what the RPA believed to be your reference amount for calculating delinked payments. This was drawn from your reference data for BPS in 2020, 2021 and 2022.
The statement does not indicate what you would receive, as delinked payments are subject to progressive reductions, just like BPS payments were.
The figure on your statement will be the starting figure for calculating what your payments will eventually be.
Timescales and eligibility
Defra introduced delinked payments in 2024 and the last payment will be made in 2027. Once these are paid, they will be the final direct payments made in England. The new method of payment is expected to significantly reduce the administrative burden for all involved parties compared to BPS.
Recipients do not need to continue farming, have land or entitlements, to be able to receive payments. However, they must have applied for BPS in 2023 to be eligible for delinked payments from 2024-2027.
How delinked payments are calculated
The calculation for delinked payments has been confirmed by Defra as follows:
Delinked reference amount x progressive reduction for that year= delinked payment value.
You can use the government's progressive reductions calculator to see how this may affect your payment for 2024 and in future years, as the progressive reduction amounts are announced.
The progressive reduction amounts have not yet been announced beyond 2024. The government is expected to announce the reduction rates for 2025 onwards.
The progressive reductions mean that the value of the delinked payment each year will be less than the reference amount. The delinked reference amount will be based on reference data that is the average of the English BPS 2020, 2021 and 2022 claims (including young farmer or greening payments) irrespective of if a claim was made in only one or two of those years.
The reference amount can be based on transferred reference data, allowing businesses with no reference data of their own to be able to receive delinked payments. 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.
This is a different reference period to the Lump Sum Exit Scheme.
The basis of BPS 2020 to 2022 values will be adjusted and will ignore a range of deductions and penalties that could have been applied in that period to avoid double reductions occurring.
The RPA expect to continue making delinked payments in two instalments each year – an advance payment of around 50% from 1 August with the remaining balance payment from 1 December. The second instalment was paid from 30 September 2024 to help farmers with cash flow following the impact of wet weather.
Business changes since 2020
Where the business had changed since 2020, the RPA recognised that there may have been changes to your business since you were paid BPS 2020 (the first year of the reference period). The RPA gave 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.
Business structure changes after 15 May 2023
If your business structure changes after 15 May 2023 (the BPS 2023 application deadline), the RPA has said it will still make the delinked payments to the SBI which claimed BPS 2023 (except for some inherited land cases).
The RPA goes on to state that you should complete an IACS 26 or IACS 27 form if you are claiming, or planning to claim, under its other schemes.
Following NFU questioning of this process, the RPA has confirmed that if it issues you with a new SBI, that SBI 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.
The RPA has also confirmed that you can change the bank account it uses 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.
The RPA will then pay any delinked payments to that bank account. Importantly, the bank account does not need to match the original trading name of the business.
Inherited Land since 2020
The RPA states that if you inherit eligible land (as BPS) in England after 15 May 2020 from a farmer who has died and who has a reference amount, you can ask the RPA to transfer all or part of that amount to you.
If a tenant has died and their beneficiary takes on their tenancy, the RPA will treat this as an inheritance of eligible land. You will not be able to ask the RPA to transfer any of the reference data until probate or letters of administration have been granted and the estate has been settled.
The RPA goes on to state that if you are the sole inheritor of the land, you can ask the RPA to transfer all the reference data from the farmer who has died. If land has been inherited by more than one person, each person can ask the RPA 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, 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 the RPA has made a delinked payment to the original business, the RPA will take the request into account for any future delinked payments which are due.
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, before delinked payments end, a sole trader dies and an executor or administrator is appointed, this will be treated as the same business. The RPA will need to be sent a grant of probate or letters of administration to be able to pay any delinked payments due.
The RPA 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 the RPA to transfer reference data to their business. They will need to make this transfer request before 31 December 2027.
Inheritance without land
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 the RPA to keep the deceased person’s SBI open.
Once probate is granted, the RPA will then continue to pay any further delinked payments to that SBI. Please note the ability to change the bank account details set out above.
Cross compliance and claiming other environmental schemes
- Cross compliance will not apply to delinked payments, as it ended in 2023. However, there is a regulatory baseline for farming within domestic legislation, which safeguards the environment and protects the health of animals, plants and people, this includes new legislation covering the management of hedgerows.
- Most of the standards in cross compliance will continue to apply to farm activities as they are already legal requirements.
- The rules you need to follow can be found at: GOV.UK | Rules for farmers and land managers
Receiving a delinked payment will not disqualify the recipient from applying for payment under new schemes, including SFI (Sustainable Farming Incentive), provided you are eligible for these schemes.
Tax
- Defra has confirmed the tax position of the delinked payment as follows:
'Where a business is in receipt of a delinked payment, these will continue to be taxed in line with the outgoing BPS payments and be income in nature.’
NFU work on delinked payments
Thanks to continued pressure by the NFU, in May 2023 we managed to receive further guidance on how certain business changes might affect your eligibility for delinked payments and what can be done to ensure you do not lose out on any payments.
We have continued to raise a number of points with the RPA and Defra on how delinked payments will be delivered from 2024 onwards, a number of these are set out in the published RPA guidance and around how payments will be issued post the creation of delinked payments where there is business change.
Over the last two years, the NFU has raised the profile of this change from BPS to delinked payments with members, through a combination of online and hardcopy articles, and a series of member webinars.
The 2021 consultation – a quick reminder
A 12-week consultation opened 18 May 2021 seeking industry views on the lump sum exit scheme and delinked payments.
The consultation included a series of questions about the proposed lump sum exit scheme including eligibility criteria and aspects of how Defra should calculate the value of the lump sum.
In terms of delinked payments, it sought views on:
- the reference period to be used to determine eligibility for delinked payments
- how to calculate the value of payments.
The NFU consulted widely with membership, engaging with some 2,500 members across various activities to help develop our consultation response.
The initial scheme information was published on 8 February 2022: Lump Sum Exit Scheme (www.gov.uk).
The RPA manages both the Lump Sum Exit Scheme and the delinked payments scheme.