Agriculture has been at the heart of Britain’s economy for hundreds of years. However, HMRC have highlighted that only a tiny proportion of farmers and growers are accessing the valuable benefit of R&D tax credits.

As agriculture becomes more sophisticated, investment continually has to be made to keep up with new trends and legislations. R&D tax credits can restore up to 33% of this investment back into the business.

Research and development towards a more environmentally sustainable business also reaps rewards with claims made to HMRC.

The UK food and drink manufacturing industry is vast. It includes bakeries, breweries, dairies and meat processors, among others. According to HMRC, however, too few businesses in this sector are claiming R&D tax credits.

The increasing demand for healthier food – less salt and sugar, for example – is one factor driving research and development in the sector. There are many others, including investment in biodegradable packaging or more efficient processes.

Within this wide range of activity there are many opportunities to apply for R&D tax credits.

cakes baked

“We weren’t aware of the claim until Paul Harrison got in touch with us and explained the R&D claim process. Paul helped us on how to go about it and opened our eyes to what we should be doing. We are very pleased with the service; it was very good.”

Horticulture client

Food & drink projects that may qualify for R&D tax relief:

  • Healthy ready meals with fewer preservatives and less salt;
  • Improving food content nutritional value;
  • Developing ingredients or food formulas that are both new and sustainable;
  • Mitigating allergies such as dairy and gluten whilst maintaining taste;
  • Improving the texture, taste and consistency of the food;
  • Development of faster, healthier and safer food handling;
  • Improving shelf life through variation of processing, storage temperature and packaging;
  • Developing better ways to minimise contamination, waste and spoilage; or,
  • Scaling up sample batches in a kitchen test environment to full production speed and quantity;

Farming projects that may qualify for R&D tax relief:

  • Fertilisers, pest and weed control
  • Adapting to atmospheric conditions e.g. silage wrap
  • Development of new machinery and components
  • Adaption of existing machinery, e.g. robotics
  • Maximise yield through soil management and smart irrigation
  • Processes to reduce waste or reuse waste products e.g. bio-fuels
  • Feed supplements to improve livestock production/reproduction
  • Use of sensors, drones and satellite technology
  • Vertical farming or hydroponics
  • Administration, finance and personnel services specifically required to support R&D activities
  • Training to support R&D

Interested in claiming R&D tax credits?

What activities can be included in a R&D project?

  • Defining technical objectives
  • Identifying uncertainties
  • Feasibility studies, reviewing new and competing technologies
  • Analysing, designing and developing the technology
  • Producing technical specification or other documents to explain and support the R&D project and advancement
  • Testing the product, process, service or software
  • Planning and managing projects

What expenditure can be claimed for in a R&D project?

  • Staff Costs – Employee costs (salary, national insurance and employer pension) are apportioned for their time spent on the R&D project plus any reimbursed associated business expenses
  • Software – Purchased for R&D purposes and costs apportioned for any subsequent use
  • Subcontracted R&D – You can claim 65% of what you paid your R&D subcontractor
  • Utilities & Consumables – Water, fuel, power and material used in the project
  • Prototypes – Produced for R&D purposes

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