Commentary

B5.124 BPS—income tax and corporation tax treatment

Business tax
Business tax | Commentary

B5.124 BPS—income tax and corporation tax treatment

Business tax | Commentary

B5.124 BPS—income tax and corporation tax treatment

From January 2021 the Agriculture Act 2020 determines policy in respect of funding for farmers and the BPS will be phased out1. The Government roadmap sets out the changes that will come into force over a period of seven years to help farmers adapt and plan for the future. There will be a transition away from the basic payment scheme (BPS) in 2021. Direct payments will be reduced fairly, with the money released being used to fund new grants and schemes.

The single payment scheme regulations2 refer to the introduction of the SPSEs as being an 'income support for farmers' (under Article 1). Under the regulations a 'farmer' is defined (under Article 2) as a person whose productions units are in the EU and who 'exercises an agricultural activity'. An 'agricultural activity' for this purpose is defined (under Article 2) as being 'the production, rearing or growing of agricultural products including the harvesting, milking, breeding animals and keeping animals for farming purposes, or maintaining the land in good agricultural and environmental conditions'. The definition of 'farmer' in the basic payment scheme regulations3 is very similar. Thus it is too simplistic to see the BPS and SPS as a subsidy to farmers. The SPS, and now the BPS, clearly envisages payments being made for land management and that the land management is desirable for the production of non-marketed goods of public benefit (especially under the environmental conditions). It is this feature that makes the

To continue reading
View the latest version of this document, as well as thousands of others like it, sign in to TolleyLibrary or register for a free trial