Prepare for the end of BPS delinked payments

If you received Basic Payment Scheme (BPS) payments, your direct farming subsidies are ending. The seven-year agricultural transition that began in 2021 concludes in 2027, with delinked payments phasing out completely.

This is the largest change to UK farm support since leaving the EU. The government's policy is to redirect farming support from area-based payments towards paying farmers for environmental outcomes, improved animal welfare, and productivity improvements.

The key facts:

BPS ended in January 2024 and was replaced by delinked payments
Delinked payments require no application and no land management conditions
Payment reductions accelerated following the October 2024 Budget and June 2025 Spending Review
Maximum payment drops from £7,200 (2025) to just £600 (2026-2027)
From 2028, there will be no delinked payments at all

This guide explains what is happening to your payments, how to calculate what you will receive, and critically, what steps you should take now to prepare for this income ending.

What are delinked payments?

Delinked payments are the transitional payments that replaced BPS in January 2024. The key differences from BPS:

Feature	BPS (ended 2023)	Delinked payments (2024-2027)
Annual application	Required every year	Not required - automatic
Land requirement	Must farm eligible land	No land requirement
Cross-compliance	Must meet standards	Not required for these payments
Payment basis	Eligible hectares claimed	Historical reference amount
Can be transferred	With land	Closed (except inheritance)

The "delinked" name reflects that payments are no longer linked to land or farming activity. Even if you have sold your farm or stopped farming, you continue to receive delinked payments until the scheme ends - based solely on your historical BPS claims.

Payment reduction schedule 2024-2027

Delinked payments were always planned to reduce progressively. However, the rate of reduction was accelerated significantly in the October 2024 Budget and confirmed in the June 2025 Spending Review.

Delinked Payments Phase-Out Timeline

BPS replacement payments being phased out 2024-2027. Maximum payment drops from £7,200 (2025) to £600 (2026-2027).

Scheme status: Delinked payments (replaced BPS in January 2024)
Application required: No - payments automatic based on historical BPS reference amount
2025 payment reductions: 76% cut on first £30,000; 100% cut on amounts above £30,000 (max payment £7,200)
2026/2027 payment reductions: 98% cut on first £30,000; 100% cut on amounts above £30,000 (max payment £600)
Payment schedule (from 2025): Single instalment from 1 August each year
Final payments: 2027 (scheme ends completely - no payments from 2028)

Delinked payments replaced the Basic Payment Scheme (BPS) in January 2024. These payments are being phased out progressively until 2027, with reductions increasing each year.

No action required - if you received BPS payments historically, delinked payments are calculated and paid automatically. You do not need to apply or maintain land in agricultural condition to receive them.

Progressive reduction rates

Year	First £30,000	Above £30,000	Maximum payment
2024	50% reduction	55-70% reduction	£15,000
2025	76% reduction	100% reduction	£7,200
2026	98% reduction	100% reduction	£600
2027	98% reduction	100% reduction	£600
2028	Payments end

Delinked payments - replacing the Basic Payment Scheme

Delinked Payments End Date

Delinked payments end completely after 2027 - no payments from 2028.

Final payment year: 2027 - last delinked payments will be made
Payments end: 2028 - no further delinked payments from this year onwards
BPS transition complete: Full transition from BPS to ELM schemes by 2028
Planning requirement: All farmers must transition to alternative income (ELM schemes, diversification) by 2028
Impact on business planning: Include transition planning in farm business plans - delinked income ends completely in 2028

Delinked payments are a time-limited transition arrangement. They will end completely after 2027, with no payments from 2028 onwards.

What this means for planning:

2027 is your final year of delinked income
Maximum payment in 2027 is just £600 (98% reduction on first £30,000)
From 2028, you need alternative income sources in place
ELM schemes (SFI, Countryside Stewardship) are designed to replace this income

Agricultural transition plan

Delinked Payments Schedule

Delinked payment timing - single annual instalment from 1 August each year (2025-2027).

Payment frequency: Once per year (single annual instalment)
Payment window: From 1 August each year
2024 payment: Two instalments (July and December) - transitional year only
2025-2027 payments: Single instalment from 1 August each year
Payment method: Direct to bank account registered with RPA
Action required: None - payments are automatic based on reference amount

Annual payment amounts by year

Year	Maximum payment	Payment timing
2024	£15,000	Two instalments (July + December)
2025	£7,200	Single instalment from 1 August
2026	£600	Single instalment from 1 August
2027	£600	Single instalment from 1 August (final year)

Delinked payments guidance

What the accelerated reductions mean in practice

The impact is stark. Consider a farm with a £50,000 reference amount (historically a medium-sized BPS claim):

Year	Payment received	Drop from previous year
2023 (final BPS year)	~£50,000	-
2024 (first delinked year)	~£22,500	-55%
2025	£7,200 (maximum)	-68%
2026	£600 (maximum)	-92%
2027	£600 (maximum)	0%
2028 onwards	£0	-100%

Farms that previously received higher BPS payments face the same maximum payment (£7,200 in 2025, £600 in 2026-2027) as smaller farms, because all payments above the first £30,000 of reference amount now receive zero payment.

Understanding your reference amount

Your reference amount determines your delinked payment. Understanding how it was calculated helps you plan for the transition.

Delinked Payments Reference Amount Calculation

How reference amounts are calculated from 2020-2022 BPS payments and used to determine delinked payments.

What is your reference amount?

Your reference amount is the average of the Direct Payments (BPS) you received during the 2020, 2021, and 2022 scheme years. This is the baseline used to calculate your delinked payment each year.

The RPA calculated your reference amount automatically when delinked payments began in 2024. You can view your reference amount in the Rural Payments service.

Reference period: Average of BPS payments from 2020, 2021, and 2022 scheme years
Where to check: Rural Payments service shows your 'reference amount' value
Can it change?: No - reference amounts are fixed and cannot be appealed or transferred (transfer window closed 10 May 2024)
Inheritance exception: Reference amounts can transfer on death with land inheritance until 2027

Example calculations

Example 1 - Small farm:
Reference amount: £20,000
2025 payment: £20,000 x (100% - 76%) = £4,800
2026/27 payment: £20,000 x (100% - 98%) = £400

Example 2 - Medium farm:
Reference amount: £40,000
2025 payment: First £30,000 x 24% = £7,200; remaining £10,000 x 0% = £0; Total = £7,200
2026/27 payment: First £30,000 x 2% = £600; remaining £10,000 x 0% = £0; Total = £600

Example 3 - Large farm:
Reference amount: £100,000
2025 payment: Maximum £7,200 (only first £30,000 receives any payment)
2026/27 payment: Maximum £600 (only first £30,000 receives any payment)

Delinked payments calculator

Finding your reference amount

Sign in to the Rural Payments service
Navigate to your business details
Look for "reference amount" or "reference data balances"
This figure is your baseline for all delinked payment calculations

Important limitations

Cannot be changed: Reference amounts are fixed based on 2020-2022 BPS claims
Cannot be transferred: The transfer window closed on 10 May 2024
Inheritance exception: Reference amounts can transfer with land on death until 2027
No appeal: If you believe your reference amount is incorrect, there is no formal appeal process, though you can contact the RPA

What you need to do for delinked payments

For the payments themselves: nothing. If you received BPS historically, delinked payments are calculated and paid automatically.

You do NOT need to:

Submit an annual claim or application
Maintain land in agricultural condition
Meet cross-compliance standards (for these payments specifically)
Own or rent any farmland
Continue farming at all

Keep your Rural Payments details up to date

While you do not need to actively claim, you must keep your Rural Payments account accurate. Update the following if anything changes:

Bank account details: Now can be updated online through the Rural Payments service
Business name and address: Particularly important if you have changed legal structure
Contact information: So the RPA can reach you about payments

Payment timing

From 2025, delinked payments are made as a single instalment from 1 August each year. This is a change from 2024, when payments were split into two instalments (50% from August, balance from December).

Planning for income replacement

The critical action is not about delinked payments - it is about what replaces them. With payments reducing to near zero, farmers need alternative income streams.

The government's stated policy is to redirect the money previously spent on BPS towards:

Environmental Land Management (ELM) schemes
Productivity and innovation grants
Animal health and welfare support
Nature recovery projects

The announced funding for 2026-2029 shows where the money is going:

Funding stream	2026/27	2027/28	2028/29
Delinked payments	£20m	£20m	£0
ELM schemes (SFI, CS, LR)	£1,950m	£1,950m	£2,000m
Productivity/innovation	£350m	£300m	£250m
Nature schemes	£450m	£450m	£450m
Total	£2,770m	£2,720m	£2,700m

The £2 billion going to ELM schemes by 2028/29 represents the redirected BPS money - but accessing it requires joining environmental schemes.

Alternative funding: Environmental Land Management schemes

The main replacement for BPS income is the Environmental Land Management suite of schemes. These pay for delivering environmental outcomes rather than simply owning farmland.

ELM Scheme Comparison - SFI vs Countryside Stewardship vs Landscape Recovery

Compare Environmental Land Management schemes to choose the right option for your farm

Environmental Land Management (ELM) schemes replaced the EU Basic Payment Scheme (BPS) in England. Three schemes operate with different purposes, lengths, and entry requirements.

Key updates for 2025/26:

SFI closed to new applications on 11 March 2025 and will reopen in Spring 2026
Countryside Stewardship is currently the main option for new environmental agreements
Schemes can be combined - you can hold agreements in multiple schemes simultaneously
2025/26 ELM budget: £1.8 billion

Sustainable Farming Incentive (SFI) - Status: CLOSED until Spring 2026 (closed 11 March 2025)
SFI - Agreement length: 3 years
SFI - Typical payment range: £58-£853 per hectare
SFI - Best for: All farms, flexible entry, 102 actions available
Countryside Stewardship (CS) - Status: OPEN (applications accepted)
CS - Agreement length: 5-10 years (Mid Tier 5 years, Higher Tier 5 or 10 years)
CS - Typical payment range: £151-£640 per hectare
CS - Best for: Environmental focus, designated sites, habitat management
Landscape Recovery - Status: Open (competitive rounds)
Landscape Recovery - Agreement length: Up to 20 years
Landscape Recovery - Payment: Project-based (bespoke agreements)
Landscape Recovery - Best for: Large-scale habitat restoration, collaboration between landowners
2025/26 ELM budget: £1.8 billion

Choosing between schemes

For new applicants (2025): With SFI closed until Spring 2026, Countryside Stewardship is currently the main route for new environmental agreements. Applications open annually (typically February-August for Mid Tier).

Combining schemes: You can hold agreements in SFI, Countryside Stewardship, and capital grants simultaneously, provided you do not receive duplicate payments for the same actions on the same land.

Existing SFI agreement holders: Your agreement continues as normal. You can add Countryside Stewardship options on different land parcels.

Environmental Land Management schemes overview

Sustainable Farming Incentive - reopening Spring 2026

SFI was the flagship scheme designed as a straightforward entry point to environmental land management. It closed to new applications on 11 March 2025 but will reopen in Spring 2026.

When SFI reopens, consider it if:

You want flexibility - 3-year agreements are shorter than Countryside Stewardship
You want to start small - no minimum land area requirements
Your land is not in a designated site (SSSIs typically need Higher Tier CS)
You want to combine environmental actions across your whole farm

Note: The new SFI 2026 scheme may have different rules, actions, and payment rates from the previous version. Details are expected in early 2026.

Sustainable Farming Incentive (SFI) - CLOSED until Spring 2026

3-year environmental land management agreements - CLOSED to new applications until Spring 2026. Existing agreements continue. 102 actions (£58-£853/ha).

Current status: CLOSED to new applications (closed 11 March 2025)
Reopening: Spring 2026 (date TBC)
Existing agreements: Continue as normal - no action required
Late applicant cap: £9,300 per year maximum for those who applied after closure announcement
Agreement length: 3 years
Number of actions: 102 actions available (for existing agreements)
Minimum land requirement: No minimum - can apply with any amount of eligible land
Payment structure: Annual payments per hectare or per unit
Example payments: £58/ha improved grassland soils, £129/ha herbal leys, £695/ha winter cover crops
Compatibility: Can combine with Countryside Stewardship and Local Nature Recovery

Common SFI actions and annual payment rates (2025)

Soils:

Assess soil, test soil organic matter, produce soil management plan: £5.80/ha
Improved grassland soils (no bare soil, multi-species sward): £58/ha
Winter cover crops: £129-£695/ha depending on options

Nutrients and pesticides:

Legume fallow: £515/ha
Herbal leys: £129/ha

Hedgerows and boundaries:

Assess and record hedgerow condition: £3/100m
Manage hedgerows: £10-£13/100m
Maintain field corners and buffers: £590/ha

Integrated pest management:

Flower-rich grass margins: £798/ha
Winter bird food: £853/ha

Farmland wildlife:

Nesting plots for lapwing and stone curlew: £474/ha
Supplementary feeding for farmland birds: £827/ha

Eligibility requirements: Manage agricultural land in England and have control of the land for the 3-year agreement
Action selection options: Select from 102 available actions based on your farm type, land, and management objectives
Application method: Submit application through Rural Payments portal specifying chosen actions and land parcels
Agreement offer process: RPA will assess application and send agreement offer with payment rates and requirements
Agreement commencement: Accept agreement and begin delivering actions from agreement start date
Annual claim process: Submit annual claim each year to receive payment for delivering agreed actions

Sustainable Farming Incentive

Countryside Stewardship - available now

With SFI closed until Spring 2026, Countryside Stewardship is currently the main route for new environmental agreements.

Consider Countryside Stewardship if:

You need to start an agreement now rather than waiting for SFI
You have designated sites (SSSIs, commons) requiring specialist management
You need capital grants for fencing, water infrastructure, or hedgerow planting
You can commit to 5-10 year agreements
You have specific habitat types needing detailed management prescriptions

Countryside Stewardship

5-10 year environmental land management agreements with annual payments (£151-£640/ha typical) plus capital grants for infrastructure.

Agreement types: Mid Tier, Higher Tier, Capital Grants, Facilitation Fund
Mid Tier length: 5 years
Higher Tier length: 5 or 10 years
Application windows: Mid Tier opens annually (typically February-August), Higher Tier ongoing
Example Mid Tier payments: £451/ha species-rich grassland, £539/ha field corner management, £640/ha nectar flower mix
Capital grants: Fencing (£4-£10/m), water troughs (£200-£500), tree guards (£3-£5 each)

Countryside Stewardship tiers

Mid Tier: For farmers wanting environmental land management without complex agreements. Choose from menu of options (grassland, arable, woodland, boundaries). Competitive scoring - highest-scoring applications selected.

Higher Tier: For more complex environmental management, often on designated sites (SSSIs, commons). Requires Farm Environment Plan from adviser. More flexible and higher payments.

Capital Grants: One-off payments for items like fencing, gates, water troughs, tree planting, bird boxes. Can be standalone or part of Mid/Higher Tier.

Common Mid Tier options and payments

Flower-rich margins and plots: £539-£640/ha
Winter bird food: £640/ha
Supplementary feeding for farmland birds: £632/ha
Species-rich grassland: £451/ha
Permanent grassland with very low inputs: £151/ha
Water quality buffer strips: £515-£557/ha

Land eligibility criteria: Land must be in England and suitable for environmental management. Some options require specific habitat types
Tier selection: Mid Tier for straightforward applications, Higher Tier for complex management or designated sites
Option selection criteria: Choose compatible options from CS handbook based on your land and objectives. Check scoring criteria
Application submission: Apply during open window (Mid Tier) or year-round (Higher Tier) through Rural Payments portal
Scoring process: Applications scored on environmental benefits. Highest scores selected within budget
Agreement offer: If successful, receive agreement with options, payment rates, and management requirements
Annual claim process: Submit annual claims confirming delivery of options to receive payments

Countryside Stewardship

Other funding options

Farming Investment Fund

Capital grants for equipment, technology, and infrastructure to improve productivity:

Farming Equipment and Technology Fund: £1,000-£25,000 at 50% grant rate
Slurry Infrastructure Grant: £25,000-£250,000 at 50% grant rate
Water Management Grant: For irrigation and water storage

Farming Equipment and Technology Fund (FETF)

Grants of £1,000-£25,000 covering 50% cost of equipment for livestock, slurry, productivity and horticulture.

Grant amount: £1,000 to £25,000 per applicant (based on 50% of cost)
Grant rate: 50% of total eligible costs
Minimum spend required: £2,000 on eligible items
Maximum spend claimed: £50,000 (to receive £25,000 grant)
Application windows: Multiple rounds per year - check GOV.UK for current dates
Items covered: Equipment for livestock, arable, horticulture, tree health, productivity, slurry management
VAT treatment: Exclude VAT if you can reclaim it

Eligible equipment categories

Animal health and welfare: Livestock handling systems, weighing equipment, calf warmers, foot trimming crushes, cattle foot baths

Slurry management: Slurry separators, digestate separators, storage covers, trailing shoe/dribble bar applicators

Productivity: Precision farming equipment, field bins, harvest trailers, robotic equipment

Horticulture: Grading equipment, irrigation systems, tree planting equipment

Eligibility requirements: Business in England with CPH number or SBI number, and be a farmer, contractor, forestry owner, or grower
Item selection criteria: Choose items from published list on GOV.UK - minimum £2,000 (before grant), maximum £50,000
Quote requirements: Obtain quotes before applying. Do not purchase items until you receive a grant agreement
Application process: Submit application through the Rural Payments portal when a funding round is open
Grant agreement: If successful, you'll receive a grant agreement with deadline to purchase and claim
Claim process: Buy items, submit claim with invoices and evidence within agreement deadline

Farming Equipment and Technology Fund

Animal Health and Welfare Pathway

Funded vet visits and disease testing:

£372-£557 per Annual Health and Welfare Review (varies by species)
Available for beef cattle, dairy cattle, sheep, and pigs
Can claim every 10 months

Free business advice

The Farming Resilience Fund provides free independent business advice to help farmers adapt to the agricultural transition. Contact providers through GOV.UK.

Farm Valuation for Inheritance Tax Purposes

How farms are valued for inheritance tax including Agricultural Property Relief, tenanted land discounts, and the impact of April 2026 threshold changes.

Valuation basis: Market value of agricultural property at date of death/transfer
APR threshold for 100% relief: £2.5 million per individual (£5 million combined for couples) from April 2026
Above threshold relief: 50% relief only (effective 20% IHT rate)
Owner-occupied farmland: 100% relief (to threshold)
Tenanted land (short tenancy): 100% relief (to threshold)
Tenanted land (pre-1995 AHA tenancy): 50% relief ONLY (landlord does not have vacant possession rights)
Farmhouse inclusion: Qualifies if occupied for purposes of agriculture and character appropriate
2-year ownership rule: Must have owned/occupied for 2 years (7 years if let)

What qualifies as agricultural property

Agricultural land and pasture
Woodland and farm buildings used for agriculture
Farmhouses occupied for the purposes of agriculture (character appropriate test)
Cottages occupied by farm workers
Farm buildings including barns, stables, and storage

What does NOT qualify

Machinery, livestock, and deadstock (may qualify for BPR instead)
Farm shops and diversification income sources
Let residential properties not connected to farming
Land used for non-agricultural purposes (e.g. equestrian livery)

Planning considerations from April 2026

With the new £2.5m/£5m thresholds, larger farms may face significant IHT bills on value exceeding the threshold. Consider: lifetime transfers (PETs), partnership structures, instalment payment options (10 years interest-free), and timing of transfers.

Agricultural Relief - HMRC guidance

Financial planning through the transition

Managing cash flow during this transition requires careful planning. The scale of income loss - potentially from tens of thousands of pounds to £600 - demands serious business review.

Model your income scenarios

Calculate your remaining delinked payments:
- 2025: Your reference amount × 24% (capped at £7,200)
- 2026-2027: Your reference amount × 2% (capped at £600)
- 2028 onwards: £0
Estimate potential ELM income:
- Review which SFI actions or CS options suit your farm
- Calculate potential payments per hectare
- Be realistic about uptake - not all land will suit all options
Identify the gap:
- Compare historical BPS + new scheme income with costs
- Factor in inflation on costs (fertiliser, fuel, labour)
Plan to bridge shortfalls:
- Cost reduction opportunities
- Diversification income
- Productivity improvements
- Or exit strategies if the business is no longer viable

Review your cost base

BPS payments historically supported land rents and input costs. As payments reduce:

Renegotiate tenancy agreements: Farm rents may need to reflect the new subsidy reality
Review input costs: Identify efficiency savings in fertiliser, feed, fuel
Assess farming system viability: Some enterprises may no longer work without subsidies
Consider machinery costs: Contract farming or machinery sharing may reduce overheads

Take professional advice

The scale of change justifies professional support:

Agricultural consultants: Can model different scenarios and advise on scheme applications
Accountants: Tax planning as income sources change
Land agents: Reviewing tenancy terms and land values
Farm business advisers: Benchmarking performance and identifying improvement areas

Diversification options

With direct payments ending, many farms are considering diversification to replace lost income. Options include:

Farm shops and direct sales: Selling produce directly to consumers
Tourism: Holiday lets, camping, glamping, farm stays
Events: Weddings, corporate events, educational visits
Renewable energy: Solar, wind, anaerobic digestion
Equestrian: Livery, riding schools, horse events
Contract services: Using machinery and skills for other farms or businesses

Each diversification route has its own regulatory requirements. See our specific guides on farm diversification compliance.

Key dates and timeline

Date	Event
January 2024	BPS ended, delinked payments began
10 May 2024	Transfer window for reference amounts closed
11 March 2025	SFI closed to new applications
1 August 2025	2025 delinked payments issued (single instalment, max £7,200)
Spring 2026	SFI expected to reopen (new scheme version)
1 August 2026	2026 delinked payments issued (max £600)
1 August 2027	Final delinked payments issued (max £600)
2028 onwards	No delinked payments - income must come from ELM, grants, or farming business

Mental health and wellbeing support

The farming community has faced significant pressure during this transition. Financial uncertainty, changing regulations, and the loss of traditional support systems can affect mental health.

Support is available from:

Farming Community Network: 03000 111 999 (7am-11pm daily)
RABI (Royal Agricultural Benevolent Institution): 0800 188 4444
Yellow Wellies (Farm Safety Foundation): www.yellowwellies.org
Samaritans: 116 123 (24 hours)

If you are struggling with the transition, please reach out. These organisations understand farming and the unique pressures you face.

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Prepare for the end of BPS delinked payments

What are delinked payments?

Payment reduction schedule 2024-2027

What the accelerated reductions mean in practice

Understanding your reference amount

Finding your reference amount

Important limitations

What you need to do for delinked payments

Keep your Rural Payments details up to date

Payment timing

Planning for income replacement

Alternative funding: Environmental Land Management schemes

Sustainable Farming Incentive - reopening Spring 2026

Countryside Stewardship - available now

Other funding options

Farming Investment Fund

Animal Health and Welfare Pathway

Free business advice

Financial planning through the transition

Model your income scenarios

Review your cost base

Take professional advice

Diversification options

Key dates and timeline

Mental health and wellbeing support

Compliance Assistant

🧪 Business Context Testing

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What are delinked payments?

Payment reduction schedule 2024-2027

What the accelerated reductions mean in practice

Understanding your reference amount

Finding your reference amount

Important limitations

What you need to do for delinked payments

Keep your Rural Payments details up to date

Payment timing

Planning for income replacement

Alternative funding: Environmental Land Management schemes

Sustainable Farming Incentive - reopening Spring 2026

Countryside Stewardship - available now

Other funding options

Farming Investment Fund

Animal Health and Welfare Pathway

Free business advice

Financial planning through the transition

Model your income scenarios

Review your cost base

Take professional advice

Diversification options

Key dates and timeline

Mental health and wellbeing support

Related guides in Grants & Funding

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