Applications for Defra’s new Lump Sum Exit Scheme open from April 2022 and it is anticipated will close in September 2022.

Further details have now been published on the scheme, helping those farmers who wish to leave the industry to make an informed financial decision about whether the lump sum is the right option for them.

Scheme information

The scheme is designed for Basic Payment Scheme (BPS) applicants who wish to leave farming, either to retire or to take up a different occupation. It is anticipated that the scheme will free up land for new entrants into the farming sector and existing farmers with plans for expansion.

Once a lump sum payment is made, applicants will no longer be eligible for BPS payments or for delinked payments, which are due to start in 2024.

Receiving a lump sum will not prevent BPS payments or delinked payments being claimed for any other businesses the applicant is involved with. Applicants can change their mind about receiving a lump sum payment at any point before the payment is made.

Meeting the Lump Sum Exit Scheme rules and leaving farming may mean the rules of other scheme agreements and grants are no longer met, including the Countryside Stewardship (CS) or the Farming Investment Fund. In some cases, money received under those schemes may need to be repaid.

After they have received the lump sum payment, applicants are still able to work as a contractor or work for other farmers.

Eligibility criteria

Applicants must have either:

  • Claimed, and been eligible for BPS payments in the 2018 scheme year or in an earlier scheme year; or
  • Inherited agricultural land in England, or succeeded to an Agricultural Holdings Act 1986 tenancy, after 15 May 2018

Before receiving the lump sum payment, eligible applicants must do all the following:

For this scheme, ‘agricultural’ land means arable land (including temporary grassland and fallow land), permanent grassland or permanent crops.

Farmers will be able to keep their farmhouse, other buildings and non-agricultural land.

The scheme not only applies to owner-occupiers and those that farm the land themselves but is also applicable to tenants with a Farm Business Tenancy (FBT) under the Agricultural Tenancies Act 1995 or an Agricultural Holdings Act 1986 tenancy.

Payment details

Payments for the scheme will begin from November 2022, once all the requirements have been met, including surrendering BPS entitlements and transferring agricultural land.

  • Eligible farmers will receive a lump sum based on their average BPS payments made for the 2019-2021 scheme years; and
  • This reference amount will be capped at £42,500 and multiplied by 2.35 to calculate the lump sum. That means the maximum lump sum which a farmer can be paid is £99,875.

The Rural Payments Agency are due to send out information to BPS applicants during February, outlining how a forecast statement can be made and providing an indication of the lump sum amount. This will help farmers decide if they would like to apply for the scheme when it opens in April.

Forecast statements can also be requested by using the Rural Payments service on 03000 200 301. A Single Business Identifier (SBI) will be required for each business a forecast statement is being requested for. Email enquiries can be sent to, with ‘Lump Sum Exit Scheme forecast statement request’ included in the subject field.

Exit payments will be treated as capital for tax purposes and therefore will be subject to Capital Gains Tax.

For more information on the options available to you, please speak to your agricultural business adviser or get in touch with your normal contact at M+A Partners who will be able to pass on your details.