Many farmers and those working in the wider agricultural 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.
R&D tax credits are actually a government incentive. They are a way of rewarding and encouraging innovation, and statistics show they’re being drastically underclaimed. If eligible, you could receive total tax relief of 44p for each £1 spent, ultimately giving you more money to invest in your business.
There are a number of ways you can qualify for R&D relief; for example, you may have spent time developing a new product, process or service, or even enhancing an existing one. The project doesn’t even need to have succeeded in order for you to make a claim.
Activities in the agricultural sector that could potentially qualify for claims include:
- 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.
A portion of the staff costs of those working directly on the project can form part of the claim, including employer’s pension and National Insurance Contributions (NICs), and even reimbursed travel expenditure. For those staff who support the R&D project as well as working on other duties, the proportion of costs relating to their involvement in or support of the project can also be claimed.
Other costs that may qualify include:
- An element of any R&D subcontracted out by your business
- Other workers (such as agency staff) enlisted to help with your R&D project
- Materials used in trials and tests etc.
- Repairs to machinery used
- Light, heat and water used
- Software used in the projects.
In addition to the above, if the whole (or even part) of a building or machinery bought or constructed in the year is used for R&D, a proportion of this can also be claimed.
We regularly help many of our clients put together successful R&D claims, and we’ll work with you from the beginning of your claim through to its completion.
We talk with your technical staff to identify the qualifying projects, work with them to write a project description, help put together your qualifying costs, and critically review both to ensure that a robust claim is being submitted.
We keep you informed every step of the way, and aim to submit your claim to HMRC within six weeks of talking to your technical staff – often sooner. We liaise with HMRC on your behalf, securing you a refund that is usually repaid to you within six weeks.
Sounds good? Then get in touch now for a free, no obligation chat with our experts, Catherine Vickery and Aisha Perrott and let us handle your R&D tax relief claim while you focus on running your business.