Agriculture is an ever-evolving industry in the UK. Similarly to the food tech industry, agricultural businesses are constantly needing to adapt and innovate in order to keep up with changes in demand, as well as overcoming pre-existing issues within the trade.
The term Agri-Tech has been coined to describe the use of technology for farming which has been developed to improve efficiency and profitability. Many activities which a farmer may consider part of their day-to-day role may actually fall into this category.
What is R&D in Agriculture?
Research and Development (R&D) tax relief is awarded to businesses that invest in innovation. This innovation can be in the form of developing new systems, processes, products, materials, devices, or any changes to the way your business works.
Claims submitted under the R&D regimes stem from activity undertaken where the aim has been to achieve an advance in either science or technology through the development of new and/or significant improvement of products, devices, materials and systems where the activity has involved scientific or technology uncertainty.
There are a number of drivers for R&D within the agriculture and farming industry. These include, but are not limited to;
- Increasing crop production for a growing population
- Developing more environmentally friendly products and processes
- Reducing energy use
- Reducing disease amongst crops/livestock
- Repurposing of waste produce
Costs including staff costs, testing on successful and unsuccessful projects and raw materials can all be used in an R&D claim.
Case Study Example:
Tax benefit identified: £30,500
This business are leading manufacturers and hirers of quality equipment to the agricultural market both in the UK and abroad. Their large hire business has given them the ideal platform to develop and then manufacture their own range of manure spreaders and trailers to suit the needs of one of the most demanding sectors of the industry. They constantly strive to improve their market position by appreciably improving and attempting new processes and developing innovative new solutions within their trade activity.
They wanted to enter the market for reversible board ploughs and recognised a gap in the market in terms of what was currently on offer and decided to develop a product that offered capability and functionality beyond anything that currently existed.
There was a large degree of technological uncertainty regarding this project as it was not known what mechanical, construction and design parameters would be required in order to provide a solution that was safe but also offered the increased functionality. The company recognised this technological uncertainty and made the decision to allocate time and resource in the pursuit of resolving the matter in order to advance their business proposition and the overall knowledge and capability in the field.
The company has had their prototype evaluated by the consumer and feedback has been extremely positive. In this regard, they believe they have taken significant steps towards achieving their aims.
Working with tax relief specialists
Although many accountants claim to be able to complete your R&D tax claim for you, the complex nature of this area of tax often requires a specialist. We recommend Catax, an industry leading tax consultancy who specialist in this form of tax relief. They employ over 100 members of staff across the UK, with an office in Glasgow, and can guarantee to maximise the claim that is made on your behalf.
Catax are the only tax relief company who can claim partnerships with some of the UK’s top accountants and solicitors, as well as the Law Society, ICAEW, and the IFA amongst other industry bodies. This adds a level of assurance to their clients that they are working with the best in the business, and their claim will be managed properly.
So far, they have helped clients claim back over £242m in tax relief, which is often invested back into the business to fund further research projects, hire new staff or to improve business premises. As mentioned above, this is a relief that HMRC encourage businesses to claim as the money often goes back into the UK economy, so there really isn’t any reason not to try it!
If you’re interested in finding out whether your business could make a claim, please contact Catax on 0300 303 1903, or email firstname.lastname@example.org for a free consultation.