Under English BPS rules, there are only two circumstances in which new entitlements can be issued to claimants by the RPA, which are to Young Farmers and/or New Farmers. A New or Young Farmer can apply only once to receive entitlements equal to their total eligible land area minus the number of entitlements they already hold. Young Farmers are also eligible for an additional top-up payment for five years. It is worth noting that if a person applied once as a New Farmer, they cannot then apply again as a Young Farmer or vice versa.
Who is a New or Young Farmer?
The RPA definition for a “New Farmer” is a person 18 or older:
- who is in control of a farm business;
- who was not personally carrying out an agricultural activity in the 5 years preceding their business’s first agricultural activity;
- whose farm business started an agricultural activity in 2013 or later;
- who submitted their first successful BPS application no later than 2 years after their business first engaged in agricultural activity;
- who makes their first successful BPS application no later than 2 years after the calendar year in which the business started farming.
A “Young Farmer” is someone who:
- is aged from 18 to 40 inclusive;
- is in control of the agricultural business for which they are applying;
- gained control of an agricultural business a maximum of 5 years before their first BPS claim.
Here “agricultural activity” means either producing agricultural products such as grain or farm animals, or maintaining land in a state where it could be used to produce agricultural products. Being “in control” means having more than 50% of votes or shares of the business. If a partnership is made up of several New or Young Farmers who together have more than 50% of votes or shares in the business, they can formally agree to vote together, and then apply for entitlements for the partnership together.
A person who has (or whose business has) recently sold entitlements cannot apply for more as the RPA deems this to be “artificial”. This is because otherwise when a business changed hands, it could sell all of its entitlements on the open market and then claim a new batch at no cost.
The Young Farmer Payment
In addition to applying for new entitlements, anyone meeting the Young Farmer definition can also claim an additional top-up payment. This equates to up to 25% of the payment, excluding greening, on up to a maximum of 90 ha, and it can be applied for each year as part of the annual BPS claim. In theory, once accepted, an eligible Young Farmer can continue to claim the payment for five years even if they then cease to meet the age requirement, i.e. if a person successfully applies for the payment when they are 40, they can then claim it until they are 45. However, we must be aware of the upcoming changes to the way payments are to be made to farmers which are currently being proposed in the Agriculture Bill, and the BPS handbook makes no promises beyond 2020. In the event of de-linkage in 2022, for example, it is not clear how the Young Farmer top-up would be handled.
What evidence is needed?
To claim new entitlements or the Young Farmer Payment, the claimant must submit a “Young and New Farmer form” which requests basic details of their business (address and SBI number) and confirmation of whether the applicant is a New or a Young Farmer. In addition there is an annex to be completed by an accountant or solicitor, called an “Accountant’s Certificate”, where they must confirm more details about the structure of the business. The claimant must also attach:
- evidence that they control the business, such as a partnership agreement or appropriate set of business accounts;
- proof of their date of birth, such as a birth certificate or passport;
- for New Farmer applicants, evidence of when the business was set up, for example a tenancy agreement or tax registration document;
- for Young Farmer applicants, evidence of when the claimant took control of the business, such as evidence of a change to a partnership document or proof of inheritance.
The rules for claiming the Young Farmer Payment after the first year have changed for 2020. A new Accountant’s Certificate need only now be submitted with the annual claim if the business structure has changed, for example if someone joins or leaves a partnership; otherwise, a certificate only needs to be submitted in the first year. This is significantly simpler than the old rules which required a new certificate, or a signed letter from an accountant saying the business’ structure has not changed, every year the Payment was claimed. For new entitlement applications, this evidence need only be submitted once, as new entitlements can only be claimed once.
As farm business structures vary, so does what evidence is necessary or appropriate for a given business. Therefore, professional support for the application is useful as this ensures that the correct documents are attached. It should also be noted that the RPA will not accept evidence submitted after the 15th May.
With delinkage expected sometime after 2021 these applications should be given extra attention as one may have a chance of benefitting from delinkage payments. No announcement has been made as yet, however, about the reference period, or if these newly allocated entitlements will qualify.
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