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August 26th 2019

R&D tax credits for farming companies

R & D tax credits have been with us for nearly twenty years now. They incentivise companies to innovate by reducing the amount of tax companies pay, or providing a credit payable by HMRC to the company in some cases. Farming companies are eligible to claim, just like any other company that is trading or preparing to trade.

Although agriculture contributes £8bn to national GDP and employs 425,000 people, the value of R & D tax credit claims made to government from the sector accounts for a tiny proportion of the total claimed – less than 1%. The conclusion? Agricultural businesses are missing out on a lot of potential credit from the government.

Common misconceptions

You needn’t wear a white coat to claim R & D credits, sometimes a pair of wellies will do!

While many farm businesses will be employing a lot of advanced technologies on site, they may think that only the manufacturers of those technologies have the right to claim. However, many farm businesses in the UK are eligible for R & D tax credits but aren’t currently claiming.

Qualifying activities

To help understand the opportunity, here are three areas of activity that could qualify for R & D credits, but might be overlooked by farmers:

  1. Developing different processes to check their success e.g. experimenting with new feed compositions or feeding techniques;
  2. Experimenting with bespoke technical solutions to solve a problem on the farm e.g. implementing novel odour control methods; and
  3. Appreciably improving technical solutions to increase their efficiency, e.g. improving an irrigation system to make it functional to the topography of your farm.

Even if a business’s attempts to innovate end up being unsuccessful they can still make a claim. So, if you’re unsure about whether you are eligible to claim then get in touch with us today.

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