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Millions in R&D tax relief unclaimed by agriculture companies – could your clients be missing out?

Official figures from HM Revenue & Customs (HMRC) suggest that agriculture companies in the UK are missing out on millions of pounds worth of Research & Development (R&D) tax credits every year.

The data has revealed that the UK agriculture sector made up less than 0.5 per cent of UK R&D tax credit claims and now those in the sector are being encouraged to consider if they are eligible to make a claim.

However, for those people that did claim from the sector, the average value of the claim was almost £52,000 in 2017-18.

Under HMRC’s rules, to get R&D relief, you need to create a new product, service or process, or change an existing product, service or process for the better.

There are five broad categories which can classify Agricultural R&D claims:

  • Staff costs
  • Subcontractors
  • Externally provided works
  • Consumables and heat
  • Light and power

Businesses must consider the full range of both qualifying activities and cost categories.

Currently, agricultural businesses are benefiting from improvement due to technology. R&D tax claims can come from process improvements, production improvement and scalability and quality control.

This is happening all over the industry, in areas such as the growing of crops, animal production and activities to support agriculture and post-harvest crop.

Even in situations when businesses are already claiming R&D tax credits, they may not have fully explored the full potential of that claim.

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