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Basic Payment Scheme - Payment reductions confirmed for 2021 to 2027

10 December 2020
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Basic Payment Scheme - Payment reductions confirmed for 2021 to 2027

It has now been confirmed how Direct Payments are to be phased out in England from 2021 to 2027. Reductions to BPS payments will start from 2021 and are to be reduced progressively until 2027. The reductions are to apply to the total payment the farmer would have received each year and are to work in a similar way to income tax bands, with bigger reductions for the higher payment bands.

The reduction in payment will also to apply to delinked payments when these replace BPS.

Payments will be reduced by the following percentages in 2021-2024:

Payment Band

Scheme Year

2021

2022

2023

2024

Up to £30,000

5%

20%

35%

50%

£30,000 to £50,000

10%

25%

40%

55%

£50,000 to £150,000

20%

35%

50%

65%

£150,000 <

25%

40%

55%

70%

 

To further explain this, the following table shows how payments will be reduced from 2021 to 2024 based on the payment value before the reductions.

Payment value before progressive reductions

2021 payment

2022 payment

2023 payment

2024 payment

£5,000

£4,750

£4,000

£3,250

£2,500

£10,000

£9,500

£8,000

£6,500

£5,000

£20,000

£19,000

£16,000

£13,000

£10,000

£40,000

£37,500

£31,500

£25,500

£19,500

£80,000

£70,500

£58,500

£46,500

£34,500

£160,000

£134,000

£110,000

£86,000

£62,000

 

As an example, in 2021 for an income of £80,000 before reductions, the calculations are as follows:

Band 0 - £30,000:                           £30,000 at 5% = £1,500 reduction

Band £30,000 - £50,000:                £20,000 at 10% = £2,000 reduction

Band £50,000 - £80,000:               £30,000 at 20% = £6,000 reduction

Total reduction £9,500

£80,000 minus £9,500 = £70,500

We will keep you updated but if you do have any queries, please call Hennie Carter or Georgina Bush on 01285 883740.

 

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