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Young Farmer payment. Check your eligibility.

View profile for Jarred Wright
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Quite a few of us at Roythornes are being approached for advice on whether farm businesses are eligible to claim the Young Farmer payment, one of the top-up payments that is available under the new Direct Payments regime that came into force this year.

If farm businesses have recently transferred, or are in the process of transferring, ‘control’ to the next generation, claiming the payment may well be worth considering. Applications have to be received by midnight on 15 June, the new BPS application deadline. You will also need to put a cross in the ‘YES’ box in Part G of the BPS application form.

Guidance, and the certificates that solicitors or accountants must sign to confirm someone’s Young Farmer status are available online. The NFU has just published further clarification from the RPA regarding the qualification criteria (published on the NFU website). It is set out below. Note in particular that where farm partnerships are concerned, the young farmer must show they have more than 50% of the ‘voting share’.

RPA’s latest clarification (via NFU) - Young Farmer applications (8.5.2015)

  • In a partnership, the young farmer must demonstrate they have more than 50% of the ownership share or more than 50 % of the profit share. They must also demonstrate they have more than 50% of the voting share.
  • If they don’t meet these requirements on their own, they could meet the young farmer rules if they have a formal written agreement with another of the partners to vote together, giving them together a majority of the business votes and shares. E.g. Farmer A has 30% shares/votes, farmer B has 30% and farmer C has 40%. If farmer A is a young farmer and has a formal written agreement with farmer B, they will together have a majority share (60%) and this business could apply for the Young Farmer Payment or National Reserve as a young farmer (if they meet the other rules). It would not matter whether farmer B was a young farmer (because, as stated in the guidance accompanying the National Reserve accountants/solicitors certificate, for young farmers only one of the farmers ‘in control’ needs to meet the young farmer rules).
  • Where there is more than one young farmer in a business and the young farmers in total have a majority of the shares and votes, there is no need for them to have a formal written agreement to vote together. E.g. Farmer A has 30% shares/votes, farmer B has 30% and farmer C has 40%. If farmer A and farmer B are both young farmers, they will in total have a majority share (60%) and this business could apply for the Young Farmer Payment or National Reserve as a young farmer (if they meet the other rules).

If you have any questions at all about the young farmer payment or farm business succession in general, please do get in touch with your usual contact at Roythornes, or with  Julie Robinson or Jarred Wright.

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