National Reserve FAQ
Page updated 22 March 2007
Questions 18 & 21 amended
Questions 8 & 18 amended (19 March 2007)
Question 21 Added (19 March 2007)
1. How is the National Reserve award calculated?
The calculation is a complex one. If you require a breakdown of how your award was calculated please write to RPA (CSC address) to request this. You can check the 'Reference Amount Calculator' for the 2005 scheme year (found under 'RPA Schemes', 'Single Payment Scheme'), which shows how the historic reference amount has been calculated, which may in turn help you to understand how your award was calculated. You can also refer back to Section F of the SPS Handbook and Guidance for England 2005 which explains how the award is calculated under each category.
2. How is the National Reserve award included in my entitlements?
The National Reserve award is a top-up to your historic reference amount. This is the amount that is stated in the National Reserve award letter. In most cases, entitlement value is made up of both an historic element (if there is one) and a flat-rate element. Claimants without any historic reference amount generally received entitlements based solely on the flat rate. See paragraphs 85 and 86 of the SPS Handbook and Guidance for England 2005 for further details.
For 2006, all entitlements have been re-valued in accordance with the scheme rules (for further details please refer to the ‘Guidance for the 2006 SPS Entitlements Statement’ booklet). If you require a further explanation of your National Reserve entitlements, please request this in writing to RPA. (Note: On entitlement statements, National Reserve (NAT.RES) awards are also referred to as English Reserve (ENG.RES) awards).
3. I have received a National Reserve award under the Investors category. I don’t understand how the award has been calculated, can you explain?
When calculating the award for this category you need to make sure you have taken into consideration 2004 scaleback for Arable area data, maize and set-aside land, Beef Special Premium Scheme (BSPS) and Extensification Premium Scheme (EPS). There is a 'Reference Amount Calculator' for the 2005 scheme year available which will allow you to see how the historic reference amount portion of your entitlements was calculated, which may in turn assist you in understanding how your National Reserve award was calculated.
4. I have received a National Reserve award under the Investors category. There is a reduction due to claiming for Beef Special Premium Scheme (BSPS). Why is this?
When calculating the award under the Investors category of the National Reserve the average claim during the reference period is compared with the 2004 claim details (after the 2004 bovine scaleback – which was approximately 30%).
5. I have EPS amounts in my historic reference amount and I do not understand the value awarded from the National Reserve.
If you are using the 'Reference Amount Calculator' on this website you will be using the figures from your SP1 information statement to complete the historic reference amounts. For EPS, the SP1 shows the figures before scaleback. The figure used to calculate your National Reserve award is after scaleback.
6. How do I know whether the value of my entitlements has been increased by more than 20% due to an award from the National Reserve?
Your entitlement statement will identify the type of entitlements you have available to you. If the value of your entitlements has been increased by more than 20% due to a National Reserve award, you will have National Reserve (NAT.RES or ENG.RES) entitlements and these will be subject to the usage rules applicable to these entitlements.
7. What are the National Reserve usage rules?
Where the entire value of an entitlement comes from the National Reserve, or where the entitlement value has been increased by more than 20% because of an allocation from the National Reserve, the entitlement will assume National Reserve (NAT.RES or ENG.RES) status. These entitlements must be used (activated/claimed upon) every year for the five years starting from their allocation in order for them to retain their National Reserve status.
8. Can I lease out my National Reserve entitlements as long as they are used every year for the five year period?
No. Entitlements with National Reserve status cannot be transferred or leased for a period of five years from their allocation, other than by inheritance or in certain cases of merger or scission of a business. In all cases the continuing obligation to meet the usage rules will rest with the farmer(s) in receipt of the entitlements.
9. If I do not use my English Reserve entitlements (in full) for five years will they be taken away?
You will only lose the National Reserve top up element to any English Reserve (ENG.RES) entitlements which you do not use. The value of this top up element then reverts to the National Reserve.
The unused ENG.RES entitlements subsequently revert to Normal entitlement status and will no longer be subject to the National Reserve usage rules. (See questions 7, 12, 13). The rules applying to Normal entitlements will then apply to these newly reverted entitlements.
Where the entire value of the entitlement comes from the National Reserve, the whole entitlement will be lost if the usage rule is not met.
10. What happens to my English Reserve entitlements if I reduce the amount of eligible land I have?
Entitlements are only considered ‘used’ when claimed against a corresponding number of eligible hectares. Consequently, should you relinquish land and as a result have insufficient land to support the entitlements you hold, the unsupported entitlements will be considered not 'used'. Any entitlement with National Reserve status that breaches the five year usage rule will be treated as set out in answer 9 above. (See question 13 also).
11. What happens to my English Reserve entitlement if I stop farming sometime during the five year period?
Any ENG.RES entitlements held will be considered unused for that year and will be treated in the same manner as described in question 9. (See questions 12 and 13 also).
12. If I don’t activate my ENG.RES entitlements when can I transfer them?
English Reserve entitlements that are not activated by the usual final SPS application deadline will be considered unused for that year. These entitlements will then be treated in the same manner as described in answer 9 and become Normal entitlements from that point.
Once the entitlements assume normal status they may be transferred, in keeping with normal transfer rules. No payment will have been made in respect of those entitlements, however, during the scheme year that they first assume normal status nor can they be activated (claimed upon) by another applicant within that same scheme year).
At the start of the subsequent scheme year the entitlements, having Normal entitlement status, may be activated as such.
In short, a NAT.RES/ENG.RES entitlement still subject to the National Reserve usage rules but not used (claimed upon) by the latest deadline for SPS application will be considered unused for that scheme year. It will then lose its associated National Reserve value, assume Normal entitlement status and may subsequently be transferred. It may, however, only be claimed upon within the scope of a subsequent scheme year.
13. What has happened to any National Reserve entitlements that I did not activate in 2005 or 2006?
Following changes to European Regulations, if you had ENG.RES entitlements whose value had been increased by more than 20% due to an allocation from the National Reserve (i.e., ENG.RES entitlements) and that you did not activate in 2005 or 2006, you will only lose the National Reserve value of those entitlements (prior to the regulatory change, the entire non-activated ENG.RES entitlement would have been lost). These former ENG.RES entitlements now have the status of Normal entitlements and are no longer subject to the National Reserve usage rules. (Note: Where the entire value of the entitlement came from the National Reserve the entire entitlement will still be lost if the usage rule was not met.
The letter sent with your 2006 Entitlements Statement (issued in January 2007) explained that the number and value of your ENG.RES entitlements as shown on your Statement may be incorrect. If so, they will be adjusted and a new Entitlements Statement issued as soon as RPA’s computer system has been updated to accommodate the regulatory change.
In the meanwhile you may transfer these entitlements for use in the 2007 scheme year. To transfer them you should complete an RLE1 form in line with current RLE 1 Guidance and submit it with a covering letter explaining that you are transferring Entitlements which were formerly classified as ENG.RES.
14. I have no historic Reference Amount but my ENG.RES entitlement value includes the Flat Rate and an award from the National Reserve. What happens if I don’t use these entitlements each year for five years?
If you do not use them for any one of the required five years, the National Reserve element of these entitlements will be lost and the entitlement value will become the flat rate only. The entitlements will then become Normal entitlements and can be transferred, subject to the rules on transferring Normal entitlements, for use in a subsequent scheme year (see question 12).
15. I have received my entitlement statement and I have previously been notified of a successful award to the National Reserve, but my entitlements statement does not show that my entitlements are National Reserve entitlement. Why is this?
If the value of your entitlements was not increased by 20% or more your entitlements are not National Reserve entitlements, and will show as another type of entitlement on your statement. However, this does not mean that your entitlements do not include the National Reserve award. Your National Reserve award is a top-up to your historic reference amount. If you have received a notification letter stating you have a successful National Reserve application, your award will have been included in the value per entitlement as shown on your statement.
16. I have received a letter stating that my National Reserve application is eligible but you have not awarded any value.
Whilst your application met all the eligibility criteria the award is calculated by comparing the total average subsidy payments for the reference years with the total subsidy claimed in 2004, calculated at the 2002 payment rate. Decreases in one sector are offset against increases in others and if there is no overall increase you will not receive an award. If you have a valid Private Contract Clause (PCC), the value of this may have been deducted from the resulting total.
17. How many successful applications have there been to the National Reserve?
Following assessment, around 9,000 farmers in England are in line to receive National Reserve funding.
18. How do I transfer my entitlements?
Should you wish to transfer your former National Reserve (Eng Res) entitlements for use in the 2007 scheme year, you will need to complete an RLE1 form and submit it by 2 April 2007.
You will need to refer to your 2005 and/or 2006 SP5 application and your latest 2005 Entitlements Statement to identify which National Reserve entitlements were not used in 2005 and/or 2006. You should then enter the details at Part C of the RLE1 form from your latest 2005 Entitlements Statement relating to the National Reserve (Eng Res) entitlements that you wish to transfer. At Part C1 of the RLE1 form, enter the existing block ID number and enter the type of entitlement at Part C3 as National Reserve (NR).
You should leave Part C4 of the form blank.
Please remember to complete all other relevant sections of the RLE1 form before it is submitted.
You must include a covering letter with your RLE1 form confirming that the National Reserve entitlements have not been used during a previous scheme year, indicating which year this was, and have reverted to Normal entitlements.
19. What is the deadline for submitting an RLE 1 form in 2007?
The deadline for submitting an RLE1 form to enable transferred entitlements to be used by the transferee during the 2007 Scheme year, is 2 April 2007.
Applications to transfer entitlements received after this date and up to 2 April 2008 will be eligible for the 2008 scheme year only.
20. Where can I obtain an RLE1 form?
RLE1 forms can be requested from the RPA website at www.rpa.gov.uk or by contacting the Customer Service Centre on 0845 603 7777.
21. My business is merging with, or splitting from, another business. Can I transfer my National Reserve (Eng.Res) entitlements?
Following changes to EU legislation National Reserve (ENG RES) entitlements can now be transferred to another business following a merger or scission. In these circumstances you must complete an RLE1 Transfer of Entitlements form. If the transfer is intended to take effect in the 2007 scheme year, this must be received by the RPA by the RLE1 deadline of 2 April 2007.
When completing the RLE1 form, at section B1 a cross should be placed in the box ‘Sale/gift of entitlements with or without land’. It is also important to write ‘merger’ or ‘scission’ next to the box, dependant on the change of business. If the new business has not yet been allocated an SBI by RPA you should leave the SBI box at section B2 blank (but you should complete the business name and address). You should also enclose a letter advising of the change in business structure. RPA may need to contact you for further information on your business structure if you have indicated that a merger or scission has taken place and you have not previously notified us.
If your business is splitting into, say, two new businesses, you will need to complete two RLE1 forms (the transferor on both forms will be the original business). In such cases the transferor can choose how he wishes the entitlements to be split between the new businesses.
If the business change has not been agreed by the RPA as a legitimate merger or scission by the end of the six-week transfer notification period, RPA will put the RLE1 ‘on hold’. It will only be reinstated once RPA have confirmed acceptance of the business change. Provided that RPA accept the change, and the RLE1 form was received by RPA by the deadlines given above, the transfer of entitlements will take effect for the 2007 scheme year.
There remains a continuing obligation on the farmer(s) in receipt of the Eng.Res entitlements to meet the usage rules for the remainder of the five years.
If you cannot find the answer to your question here, then please ring
the Customer Service Centre on 0845 603 7777.
If your enquiry is not urgent please e-mail us at CSC@rpa.gsi.gov.uk or write to us at:
Rural Payments Agency
PO Box 1058
Page published: 27 June 2011