7th May 2021
TIME TO GET YOUR HOUSE IN ORDER
As we fast approach the deadline for BPS claims for 2021, bringing with it a minimum of 5% reduction in the payment received in 2020 (in England and Wales); a further minimum 20% reduction in 2022 and a reduction of 50% in 2024 for all recipients there has never been a more important time to get your house in order. The implementation of The ELM scheme will provide new avenues for funding for farmers but with it will come new requirements and new red tape all of which will differ significantly from the requirements of the current Basic Payment Scheme. Now is the time to begin thinking about the effect of the changes to your business and what changes you can, want or need to make.
In Scotland we have the guarantee of BPS continuing as it is now until 2024 giving a little comfort and some more time. However, it is expected that there will be changes to funding thereafter. In the interim the proposed changes to Regulations around Silage and Slurry storage are likely to come into force requiring investment from most businesses into their holding. Whilst the continuation of BPS eases the pressure for making changes, change is coming and businesses in Scotland should also be starting to consider the future.
PLANNING FOR THE FUTURE
In the last month, I have seen three families with significant added heartache following the death of a loved one because there had been little or no discussion about the future. The contents of a Will had been kept secret. Succession planning is always incredibly important but especially so now in a changing financial landscape. In England, Defra intend to offer farmers a lump sum retirement payment in 2022 to replace the BPS annual payment from 2022-2028. It has been indicated that this will require the recipient to leave the industry but what remains unclear is to what extent they will be required to leave. Will the farm need to be sold or will the recipient just need to leave a partnership? The conversations required across families take time and care and all factors need to be considered. Whilst we lack clarity on the detail of the legislation, it is more important than ever to have those honest conversations regarding succession so that when the detail is published you are in a position to act. Does the next generation want to farm? Are they in a position to get finance if the farm requires a change of ownership? Are they just farming out of obligation? Succession and Inheritance rights are a complex matter and it is crucial to take legal and financial advice from your trusted advisors to take account of your specific situation and ensure that the plans take account of the laws governing your part of the UK.
Taking the steps now to understand what everyone wants to achieve from the changes puts your business in the best position to take advantage of the changes that are coming and to make the changes that it is going to be imperative for farming businesses to make to continue to thrive in the post-BPS era. I urge you, regardless of which side of the border you are on, talk to your bank; talk to your accountant, solicitor and land agent; talk to your family and make a plan for the future.Back to Archive