COVID-19: Practical guidance for our rural and farming clients #19
In the South West, the impact of COVID-19 has presented many of our farming clients with real concerns but also opportunity. In this update we discuss Research & Development (R&D) tax relief, Working Tax Credits, eligibility and registering for the ‘Eat Out to Help Out’ Scheme. We also provide HMRC links for updates on the Job Retention Scheme.
If you would like to explore ideas for your own business further, increase your confidence in making financial or tax decisions or just talk your ideas through, then please do give us a call.
Finally, we are preparing for a ‘Virtual Breakfast’ on Friday 24 July dedicated to demystifying Research & Development tax credits for agricultural businesses. If you’re a farming company please join us as we explain agricultural R&D tax credits, the eligibility criteria, discuss the questions you should be asking and detail the process on how you should submit a claim. Join us by registering here.
15th July 2020
Andrew Vickery See profile
One of the sectors where R&D is most underclaimed is in agriculture. Many farmers and those working in the wider industry don’t believe they can benefit from R&D tax relief because ‘there can’t be much R&D happening in the rural space’. But this simply isn’t true. R&D tax relief applies to many sectors, and the agricultural sector is certainly one of them.
If you haven’t already considered R&D tax credits, there is no better time than now, where times are uncertain and most companies could do with that extra cash boost.
If eligible, you could receive total tax relief of 44p for each £1 spent on R&D, ultimately giving you more money to invest in your business.
Here are some examples of successful claims within the industry:
- Robotics and AI
- The use of drones
- Adapting existing machinery
- Creating bespoke software
- Developing drugs for disease management
- Creating farming techniques using less space, such as indoors under LED lighting
- Developing disease resistant crops
- Pest control
- Energy and water efficiency
- New soil treatments or processes
- Odour control or irrigation.
When considering a claim, it’s vitally important that you understand, the benefits, the criteria, and how to mitigate risk by submitting a robust report to HMRC. Our in-house R&D specialists, Catherine Vickery and Aisha Perrott can help with this. Feel free to get in touch if you would like to explore this further or join us at our webinar on Friday 24 July.
At the beginning of COVID-19, HMRC announced those who claim Working Tax Credits will receive up to £20 extra each week from 6 April 2020 until 5 April 2021, as part of a number of measures to support individuals during the coronavirus pandemic. The deadline for informing HMRC of changes to your working tax credit is 31 July otherwise payments will be stopped.
While most tax credit awards will be renewed automatically, if you are either self-employed, in receipt of taxable social security benefit or have other income, you should review your total household income and tell HMRC if the income held is incorrect to their own calculations.
How to review your tax credit details
Most claimants will receive a letter or text with the details HMRC have for them, if you haven’t received a communication and want to review/make changes then you can:
Self-employed working tax credits
If you’re claiming Working Tax Credits and are self-employed but haven’t yet filed your tax return for the 2019 to 2020 tax year, you should estimate your profit or loss and report this to HMRC online by 31 July 2020. Without this information, HMRC will finalise using the information they already hold.
It’s worth noting that tax credits are gradually being replace by Universal Credit. You can’t receive tax credits and Universal Credit at the same time.
Please get in touch if you need some help or advice.
During COVID-19 we’ve worked almost daily with farming clients who have a diversification serving food. Full details have now been released on who can apply to utilise the government’s ‘Eat Out to Help Out’ Scheme.
As a reminder, restaurants, bars, cafes and other establishments who use the scheme will be able to offer a 50% reduction, up to a maximum of £10 per person, to all diners who eat and/or drink-in on a Monday, Tuesday or Wednesday in August 2020.
Who can register?
- If you sell food that is intended for consumption on the premises when purchased
- You provide your own dining area or share a dining area with another establishment for eat-in meals
- You have been registered as a food business with the relevant local authority on or before 7 July
Who can’t register?
- An establishment that only offers takeaway food or drink
- Catering services for private functions
- A hotel that provides room service only
- Dining services (such as packaged dinner cruises)
- Mobile food vans or trailers
How to register
Businesses can register to be part of the scheme online at GOV.UK. You’ll need a Government Gateway user ID and password for your business.
As ever, we are here to help and navigate you through the VAT points, please feel free to call us.
While in the farming sector there has been less need to furlough staff and access the funding available we have been advising on the reduction of staff in other agri-businesses. Particularly those who can’t utilise their workforce as they rely on manufacturing suppliers who’ve been hit by COVID-19 for their materials. HMRC have information and resource on their website.
- Reporting employees’ wages to HMRC when you’ve claimed through the Coronavirus Job Retention Scheme
- Steps to take before calculating your claim using the Coronavirus Job Retention Scheme
- Check which employees you can put on furlough to use the Coronavirus Job Retention Scheme
- Check if you can claim for your employees’ wages through the Coronavirus Job Retention Scheme
- Check if your employer can use the Coronavirus Job Retention Scheme
- Claim for wages through the Coronavirus Job Retention Scheme
- Calculate how much you can claim using the Coronavirus Job Retention Scheme