The Agriculture (Delinked Payments) (Reductions) (England) Regulations 2026 set the final reduction rates for England’s delinked payments in both the 2026 and 2027 scheme years. Under the table in regulation 3, the first £30,000 of a delinked payment is reduced by 98%, while any amount above £30,000 is reduced by 100%. The instrument is subject to the affirmative procedure and states that it comes into force 21 days after being made; it extends to England and Wales but has practical effect only in relation to England. (legislation.gov.uk)
That is the next step in a structure created by the Agriculture Act 2020, which allows direct payments to be delinked from land during the agricultural transition. The Rural Payments Agency replaced the Basic Payment Scheme in England with delinked payments in 2024, and government guidance says recipients no longer need land or entitlements and do not need to submit a fresh annual claim. Eligibility instead rests mainly on having claimed and been eligible for BPS in the 2023 scheme year, or qualifying through the inheritance provisions, together with holding a reference amount. (legislation.gov.uk) That reference amount is normally the average of BPS payments for 2020, 2021 and 2022. As a result, the 2026 Regulations do not assess current acreage, stocking levels or present-day production; they reduce a payment stream that is already based on historic support data. (gov.uk)
In legal terms, the 2026 SI does not redesign the delinked payments scheme. Regulation 3 instructs the Secretary of State to apply the new percentages to the amount calculated under paragraph 5 of Schedule 1 to the 2023 Delinked Payments Regulations for the years beginning 1 January 2026 and 1 January 2027, and regulation 4 then reads references to a 'delinked payment' in Part 3 of the 2023 regime as meaning the reduced amount after those percentages have been applied. (legislation.gov.uk) Policy-wise, that means the eligibility rules, the historic reference period and the existing payment administration stay in place; the change is the size of the payment, not the class of recipient. The legislation is therefore best read as a rate-setting instrument sitting on top of the 2023 framework rather than a new scheme in its own right. This is an inference from the text of the instrument and the underlying guidance. (legislation.gov.uk)
The scale of the reduction is stark. On the government’s own formula, a business with a £25,000 reference amount would receive £500 in 2026 or 2027; a business at £30,000 would receive £600; and a business at £40,000 would also receive £600 because everything above £30,000 is removed in full. (gov.uk) In practical terms, any reference amount above £30,000 now produces the same residual payment. For finance planning, that means delinked payments move from being a declining support line to a largely nominal one for many recipients. The second sentence is an inference from the statutory percentages and the worked calculations. (legislation.gov.uk)
The pace of the phase-out is clearer when set beside the previous year. The 2025 Regulations reduced the first £30,000 by 76% and removed any amount above £30,000 in full, while Defra’s 2025 Explanatory Memorandum said that around 80% of roughly 82,000 delinked payment recipients had pre-reduction payment amounts at or below £30,000. Defra also noted that those recipients had faced a 50% reduction in 2024. (legislation.gov.uk) Seen in that sequence, the 2026 Regulations do not introduce a new policy direction so much as compress the remaining life of the old one. The Agriculture Act explanatory notes describe the agricultural transition period for England as seven years beginning in 2021, with delinked payments sitting within that transition and the payment stream ending at the end of the period unless extended. (legislation.gov.uk)
For recipients, the immediate administrative position is relatively simple. GOV.UK guidance says the Rural Payments Agency plans to make the 2026 and 2027 delinked payments as single payments from 1 August each year, and it reiterates that a business can still receive delinked payments even if it stops farming after the BPS 2023 application deadline, provided it remains eligible under the scheme rules. (gov.uk) The wider policy message is that funding is being redirected away from untargeted legacy support. The delinked payments calculator says the reductions help fund new schemes and grants, while Spending Review 2025 said the government would invest more than £2.7 billion a year in sustainable farming and nature recovery from 2026-27 to 2028-29, sustained by rapidly winding down subsidy payments. In the government’s June 2025 farming update, indicative allocations showed delinked payments at £20 million in 2026-27 and £20 million in 2027-28, falling to zero in 2028-29. The instrument’s explanatory note adds that no full impact assessment was produced because no, or no significant, effect on the private, voluntary or public sector was foreseen. (calculate-direct-payment-reductions.defra.gov.uk)