R&D tax credits are a central element of the UK Government’s strategy to encourage more research and innovation amongst the SME-scale businesses. Many agriculture business leaders are not fully aware that their company could be eligible for R&D Tax Credits.
This scheme provides a valuable tax incentive for SME-scale limited liability companies that are trialling new ways of working, advanced data sources and innovative technologies. The scheme rewards businesses that are taking risks and investing to advance their business performance, resilience and sustainability.
To pursue a successful claim requires careful assessment of all eligibility criteria and investment in R&D. With a recent intensification of HMRC compliance checks on R&D tax credit claims, it is even more important to work with a trusted professional adviser who will help you navigate a complex landscape of different rebates and grants that are available to the agricultural sector.
Research and Development Tax Relief (also called R&D Tax Credits) is becoming better-known as a valuable incentive offered by the UK Government to help innovative SME-scale businesses. However, when we meet Agriculture business leaders, right across the country, many do not realise that they could be eligible for R&D Tax Credits. As a result, many may be missing out on a high value Corporation Tax rebate – significant rebates or cash payments from HMRC that they are fully entitled to receive.
With rising inflationary pressures and volatility in the costs associated with raw materials, animal feed, fertilisers, energy, haulage and labour, we believe it is increasingly vital to secure this valuable cash-flow advantage, where your limited liability company is eligible.
There are a huge range of complications, challenges and opportunities facing the UK agriculture sector. In our experience, many British famers are tackling these challenges head-on, with widespread testing and innovation of new techniques and technologies, while in parallel maintaining and elevating their long-term stewardship of our landscape and local ecosystems.
In response to this complex and fast shifting set of changes and challenges, farmers and agriculture managers across the UK are exploring a wide range of new innovations to drive up yields, reduce costs, ensure regulatory compliance, diversify and build commercial resilience.
R&D tax credits can help to fund some of these projects. What is very important to understand is that this relief can be claimed retrospectively, rewarding your business for the costs and time that you have already invested in R&D and innovation.
As with any tax relief, there are many specific rules that must be met to benefit from a successful claim.
Since 2014, the experts at Easy R&D have helped a wide variety of our agricultural clients to navigate the claims process and access valuable R&D reliefs – unlocking cash and fuelling further innovation.
To claim R&D tax credits requires a limited liability company (LLPs are not eligible) to be seeking an ‘advance’ in a field of ‘science or technology’.
Many clients will tell us that they do not believe they fit these criteria. But, after our team of consultants work with them, we often quickly identify just how innovative their business really is, and as a result that they are eligible for R&D Tax Credits.
Typical projects that we see in the agriculture sector which may qualify for R&D tax reliefs include:
• Increasing crop production & yield
• Replacing banned chemicals or materials (e.g., CIPC)
• Reducing the carbon footprint of the business
• Trialling new weed control techniques
• Robotics, remote sensing & drones
• Enhanced management & irrigation of soil
• Better protection against evolving environmental threats
• New processes to reduce waste and/or re-use waste products
Agricultural managers are becoming increasingly experienced at navigating a complex and growing set of Government incentives, grants and rebates. In fact, for many UK farm businesses, government support is a critical part of the business resilience and success. R&D Tax Credits can be one important part of enhancing both the cash position and the long-term prospects of your agriculture business. But is important that any R&D tax credit claims are made with full knowledge of all other rebates and grants that an agricultural company is claiming.
The Future Farming government website sets out the broad range funding available to support innovative UK farming projects and trials. Where grants and other funding options are used, these can have a direct impact upon the scale or eligibility of an R&D claim. So, it is important to ensure your R&D adviser is diligent when assessing a potential R&D tax credit claim. They need to fully understand the other government incentives and grants that your business is already claiming, and to advise you on the impact on the R&D tax credit claim that can be made.
HMRC are actively increasing their compliance checks on R&D tax credits, with a more assertive and widespread checking process. Their objectives are simple, and we fully support the steps that HMRC are taking to encourage correct R& D tax relief claims, while in parallel reducing a minority of erroneous or deliberately over-stated applications.
The best specialist advisers will guide you through the claims process, optimising both the value and risk profile of your claim, helping you create a full suite of technical reports to evidence a claim and fully indemnifying you against the professional fees associated with any HRMC enquiry.
If you would like to get in touch with the expert Easy R&D team to discuss a potential claim for your agricultural business or to review recent R&D claims, please contact us at:
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Every customer and every claim we work with benefits from our deep expertise in how HMRC manages R&D tax credit applications.