CAP reform – Basic Payment Scheme

1 January 2015 saw the introduction of the Basic Payment Scheme (BPS) which replaced the existing Single Farm Payment Scheme.

Changes under this new legislation include the new online CAP Information Service, although the RPA has now announced that paper-based applications will be accepted for this year as the new IT systems are not yet operating effectively. There are strict eligibility criteria being implemented by the EU which may prevent some businesses from claiming.

Only “active farmers” will be eligible for the BPS. To qualify as a “farmer” the claimant must either carry out agricultural activities such as growing agricultural products or maintain an agricultural area in a state suitable for grazing or cultivation. The latter is important for claimants not actually growing any agricultural products. Operating an equestrian business or a sporting ground may not qualify you under the “active farmer” criterion.Cross-country courses, gallops or point-to-point courses which have permanent facilities (such as permanent viewing stands or sanitary facilities) and are not used for solely personal use may fall foul of the regulations. However, if a cross-country course venture and farming business are operated as two distinctly separate businesses, you should not be affected.

Take care if you are thinking about restructuring your existing business to “fit” the new regulatory requirements. There are strict anti-avoidance rules which could see your claim jeopardised.