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Farm Subsidy Direct Payments to End by 2027

Farm subsidies in England will be phased out over 7 years (announced Wednesday this week), ending 2027, under plans outlined in the governments Agriculture Bill. Direct payments will be replaced with a new system of ‘public money for public goods’ largely based on rewarding farmers who undertake environmental measures. Direct payments for 2019 and 2020 will be made on the same basis, but will start to be phased out from 2021. Most farmers will see a reduction to their payments during the transition:

  • Up to £30k – 5% reduction
  • £30k-£50k – 10%
  • £50k-£150k – 20%
  • Over £150k – 25%

A pilot Environmental Land Management (ELM) scheme will begin next year, with Defra working with farmers to design, develop and trial the new approach. This will include funding for farmers who collaborate on R&D projects, e.g. soil health or sustainable livestock farming.

The content of this article is for general information only and does not constitute tax advice. It should not be relied upon and action which could affect your business should not be taken without appropriate professional advice.

Written by Ellie Hammett ACCA


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