Lump Sum Exit Scheme

farmerm · Apr 10, 2021

Still Farming said:
Why?
Tied to Land area ,NOT Retiring Farmer as stated is it???
Anyone can farm land surly???

The treasury isn't going to allow payment on entitlements to be given twice! Taking the lump sum from the government will surely results in forfeiting the BPS entitlements associated with them? If that is the case someone new coming in to farm that land will be entitled to apply for ELMS but to claim BPS in its dying years they would need to buy entitlements from someone else willing to cash theirs in... If the lump sum exit option is open to any business with BPS entitlements and if available as an option that can be taken any time after 2022, it will likely to be preferable for any entitlement holders to cash their remaining BPS entitlements with the government rather than sell them to someone with bare land. In any case, from 2024 entitlements will be decoupled from land so they basically become a government bond with a known cash value, they will be priced as such..

teslacoils · Apr 10, 2021

Would not surprise me if anyone taking the lump sum just happened to get a random inspection.

B'o'B · Apr 10, 2021

farmerm said:
The treasury isn't going to allow payment on entitlements to be given twice! Taking the lump sum from the government will surely results in forfeiting the BPS entitlements associated with them? If that is the case someone new coming in to farm that land will be entitled to apply for ELMS but to claim BPS in its dying years they would need to buy entitlements from someone else willing to cash theirs in... If the lump sum exit option is open to any business with BPS entitlements and if available as an option that can be taken any time after 2022, it will likely to be preferable for any entitlement holders to cash their remaining BPS entitlements with the government rather than sell them to someone with bare land. In any case, from 2024 entitlements will be decoupled from land so they basically become a government bond with a known cash value, they will be priced as such..

That’s a better way of putting it!

Martin Holden · Apr 10, 2021

Derrick Hughes said:
Be interesting to do a survey on who farms but takes the bulk of their income elsewhere, not just small farms either , in some of those cases farm profit would not be their top priority

Yes would be an eye opener I expect!

DRC · Apr 10, 2021

How would it work with big organisations that claim millions in BPS. A lot of these types aren’t farming anyway, so can’t retire from farming

neilo · Apr 10, 2021

teslacoils said:
It's called shitting on those with livestock or who live near a river.

........ and as for anyone that’s not Farm Assured....

B'o'B · Apr 10, 2021

silverfox said:
How would it work with big organisations that claim millions in BPS. A lot of these types aren’t farming anyway, so can’t retire from farming

They just collect the reducing payments.

Formatted · Apr 10, 2021

I think if you are on this forum you are not the target for the Lump Sum Scheme. Think it is predominately aimed at very old farmers, maybe tenants or those on marginal land who have no assets to retire on, they live off the BPS and without that going they are going to go bankrupt. The exit scheme will give them enough to pay for care or a bunaglow in the village.

Still Farming · Apr 10, 2021

farmerm said:
The treasury isn't going to allow payment on entitlements to be given twice! Taking the lump sum from the government will surely results in forfeiting the BPS entitlements associated with them? If that is the case someone new coming in to farm that land will be entitled to apply for ELMS but to claim BPS in its dying years they would need to buy entitlements from someone else willing to cash theirs in... If the lump sum exit option is open to any business with BPS entitlements and if available as an option that can be taken any time after 2022, it will likely to be preferable for any entitlement holders to cash their remaining BPS entitlements with the government rather than sell them to someone with bare land. In any case, from 2024 entitlements will be decoupled from land so they basically become a government bond with a known cash value, they will be priced as such..

Unless you sell your entilements first and qualifying years apply?

Still Farming · Apr 10, 2021

Formatted said:
I think if you are on this forum you are not the target for the Lump Sum Scheme. Think it is predominately aimed at very old farmers, maybe tenants or those on marginal land who have no assets to retire on, they live off the BPS and without that going they are going to go bankrupt. The exit scheme will give them enough to pay for care or a bunaglow in the village.

I don't mind Retiring if the money's right?

B'o'B · Apr 10, 2021

Still Farming said:
Unless you sell your entilements first and qualifying years apply?

By definition new entrant won’t have been farming in qualifying years.

glasshouse · Apr 10, 2021

Its a pretty stupid idea

MrNoo · Apr 10, 2021

Still Farming said:
I don't mind Retiring if the money's right?

It wont be though will it, how long would 150k last in a care home, not long. Wouldnt buy you much of a pad in the Bahamas either, cant see many getting excited about it to be honest. Still we'll have the details soon enough.
If they were offering £2,500/ha that would maybe change my mind, that's where it needs to be or above and tax free.

Still Farming · Apr 10, 2021

MrNoo said:
It wont be though will it, how long would 150k last in a care home, not long. Wouldnt buy you much of a pad in the Bahamas either, cant see many getting excited about it to be honest. Still we'll have the details soon enough.
If they were offering £2,500/ha that would maybe change my mind, that's where it needs to be or above and tax free.

In reality, We all don't have expensive ideas or expectations?
But there lies the crux of it all : Would Farmer's EVER be happy???

Still Farming · Apr 10, 2021

MrNoo said:
It wont be though will it, how long would 150k last in a care home, not long. Wouldnt buy you much of a pad in the Bahamas either, cant see many getting excited about it to be honest. Still we'll have the details soon enough.
If they were offering £2,500/ha that would maybe change my mind, that's where it needs to be or above and tax free.

Have you ever been to the Bahamas?
Most live in tin sheds ,your chicken's got better???

teslacoils · Apr 10, 2021

I'd live in a tin shed in the Bahamas.

farmerm · Apr 10, 2021

Formatted said:
I think if you are on this forum you are not the target for the Lump Sum Scheme. Think it is predominately aimed at very old farmers, maybe tenants or those on marginal land who have no assets to retire on, they live off the BPS and without that going they are going to go bankrupt. The exit scheme will give them enough to pay for care or a bunaglow in the village.

Its unlikely to be anything near enough to provide care or a bungalow for anyone farming less than 1000 acres! BPS has always been paid to business not individuals, often farm business operate multi-generational partnerships. I doubt the option to choose to take a lump sum will have any age requirement, I expect all BPS recipients will be given the option to take a lump sum equivalent to their remaining BPS payments (or at least a large proportion of them) in any payment window from December 2022 to December 2026 in exchange for the surrender of their BPS entitlements. The more who take up the lump sum option and the earlier they do so, the less BPS administration work remains for the RPA. The lump sum option is due in 2022 so taking the lump in 2022 would be in leu of claiming payments in 23, 24, 25 and 26, the combined total of these payments would be less than £50,000 for a farm that made a £25,000 BPS claim in 2020, it would at least in part be taxed at 40%, it won't buy a garage let alone a bungalow...

Formatted · Apr 10, 2021

farmerm said:
The lump sum option is due in 2022 so taking the lump in 2022 would be in leu of claiming payments in 23, 24, 25 and 26,

When I spoke to the future farming policy team at DEFRA in January they had ditched this idea because they realised there would be no way to incentivise adhering to cross-compliance rules. This payment is strictly for people who will be exiting the industry.

farmerm said:
often farm business operate multi-generational partnerships

As I said in my original post this payment is targeted at farming tenants or marginal farms that have no succession and limited assets. Its not designed to support large farms or farms that are sustainable under the new funding regime.

MrNoo · Apr 10, 2021

Still Farming said:
Have you ever been to the Bahamas?
Most live in tin sheds ,your chicken's got better???

No never, but realistically 150k doesn’t go far does it in later life.
If the Gov are serious about getting older farmers to move aside then they need to put their money where their mouth is.
My lifestyle has zero bearing on my expectations, I have no pension and take out 900/month, hardly flash is it.

The Seeker · Apr 10, 2021

Old farmers know that moneys not worth as much the older you get, it will thin out some but only because it suits the business not because they are forced to to it

Lump Sum Exit Scheme

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0 %

Up to 25%

25-50%

50-75%

75-100%

100% I’ve had enough of farming!

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