Back to topQuota can be leased between quota holders for the duration of one milk year only, ie the quota litres are reinstated to the lessor for 1st April of the next milk year. The scheme is open to applications between 1st April and 31st December each year. Leasing is sanctioned by Article 6 of Council Regulation (EEC) No 3950/92 as amended and reg 13 of the Dairy Produce Quotas Regulations 1997.
Having obtained
written instructions and all supporting documentation from the lessor the quota
is leased by private treaty, or auction.
(a) Private treaty - We obtain the verbal agreement of the lessor or
authorised agent to each transaction before preparing and issuing the appropriate
paperwork.
(b) Auction - Instructions are ascertained before offering quota for
lease by auction.
In the interest of orderly and ethical marketing, lessors are asked to grant
Bruton Knowles sole agency for the leasing of their quota.
Until this point
the lease is "subject to contract". Provisional Completion is effected:
(a) at the fall of the hammer if leased by auction
(b) when both parties have signed the leasing form and/or letter of authority
and payment (either in full or part if a deposit transaction) has been received
by Bruton Knowles and cleared. At this stage neither party can withdraw from
a transaction.
A transaction is not complete until the Rural Payments Agency issues confirmation in writing advising the application has been processed. Between the date of Provisional Completion and completion the consideration monies will be held by Bruton Knowles as stakeholders. Upon completion the money together with interest thereon (if it exceed £5.00) less our commission plus VAT will be released to the lessor. If the Board does not process the application the money will be refunded and a credit note issued to the lessee.
For private treaty
transactions Bruton Knowles aims to issue appropriate documentation within 24
hours of obtaining verbal agreement from both parties. Payment in full is normally
expected to be made by the lessee to Bruton Knowles within 7 working days from
the date of the invoice.
A "Deposit Transaction" applicable for forward leasing only, requires the deposit
element together with the entirety of the VAT and RPA fee to be paid to Bruton
Knowles within 7 working days of the invoice date. The second instalment is
normally due on or before the start of the relevant milk year.
The Rural Payments Agency aims to process properly completed applications with
28 days of receipt.
Lessors are required to furnish Bruton Knowles with evidence the transfer has
been processed in the form of the RPA's "Registration of Quota Movement" notification.
Bruton Knowles is unable to release the money without such evidence.
Income realised from leasing out milk quota is currently subject to VAT at standard rate. Bruton Knowles has HM Customs & Excise approval to operate a self billing system for VAT. This system removes the necessity for lessors to render invoices to lessees and ensures lessees are in possession of a valid VAT invoice at the start of the transaction.
In the interest of expediting early completion of transactions it is helpful if lessors authorise a member of Bruton Knowles to sign leasing applications on their behalf. Bruton Knowles cannot process the lease without either the lessor's signature on the leasing application or a signed letter of authority from the lessor.
Commission/Fee
- The lessor is advised of the basis of charge to be imposed prior to confirming
instructions. The fee/commission is deducted from the money held on account
upon completion of the transaction(s). The lessee is not normally subject to
a charge from Bruton Knowles.
Abortive Work Charges It is our policy to discourage both lessor and lessees
from the practice of withdrawing from agreed leased (on the grounds of price
movement) prior to the point of Provisional Completion. In the even of a transaction
failing to proceed for any reason we reserve the right to charge the lessor
or lessee at our discretion an administration fee not exceeding £200 plus VAT
or £299 plus VAT per transaction (if transactions have been agreed, subject
to contract) whichever be the higher. In addition we reserve the right to terminate
instructions with transferors, or in the case of lessees, cease to do business
with them in the future.
When completing the Rural Payments Agency's leasing application form the lessee undertakes to remit payment of an administrative charge imposed by the Intervention Board. Bruton Knowles collects payment from lessees together with the sum due in respect of the lease.
Notice
Any prospective or actual lessor of milk quota should consider taking appropriate
legal advice in respect of the transaction.
Bruton Knowles NQE Bisley House, Green Farm Business Park, Bristol Road,
Gloucester, GL2 4LY.