Contents
As the world changes and the effects of climate change become more keenly felt by an ever-expanding section of the population, traditional approaches to agriculture may no longer be sufficient to meet global needs.
For the agriculture sector, there is a lot of innovation going on that is being overlooked when the time comes to file R&D tax relief claims.
We want to highlight how some of the efforts that are going into future-proofing agriculture may qualify for R&D tax reliefs.
How can the agriculture sector be future-proofed?
Official policy is slowly shifting to recognise the increasing challenges that farmers and growers are experiencing both domestically and internationally.
The role of the innovative business is to find sustainable practices that can enable crops to continue growing and livestock to survive even as the climate becomes increasingly hostile to both.
While animal husbandry and the rotation of crops will not qualify for R&D tax relief claims, using the latest technology to assist farmers can be R&D.
Work in this area may involve the utilisation of AI systems to better determine when crops need watering, thus reducing water waste.
In areas where the soil is no longer compatible for growing crops, hydroponic systems can be developed to ensure that global food supplies are not adversely affected by the desertification of previously fertile farmland.
The real challenge that is faced by those seeking innovation in the agriculture sector is to frame the work that they do as being innovative and advancing the overall state of science and technology.
Advances are most likely to focus on pushing back against the impact of climate change or may centre on work conducted in assisting other countries with their own food production.
While R&D work typically has to take place in the UK to qualify for R&D tax relief, it is possible to conduct work overseas if there is no suitable alternative.
Working to grow crops in a desert environment would be best done overseas, given the distinct lack of deserts in the UK and this could be evidenced and justified within an R&D tax relief claim.
What is the best way to approach R&D tax relief claims in the agriculture sector?
The work that is done to advance science and technology needs to be distinct from regular farming practices.
It is unlikely that farmers themselves will be doing work that would qualify for R&D tax reliefs, but they may be in consultation with innovative businesses to determine the efficacy of any advance that is being developed.
Therefore, the work that is conducted to assist farmers from a technological perspective should be the focus of any R&D tax relief claim.
As such, the technical narrative is going to be of particular importance to the claim.
It will be necessary to explain why the work done counts as a scientific advance and this can also be where any overseas work is justified.
Documenting the trial-and-error process of the innovative work is also vital for proving the scale of the uncertainty.
Be warned that HMRC may view claims filed in the agriculture sector with suspicion, given that it has been the realm of ineligible claims in the past.
As R&D tax consultants, we will defend any eligible claim from an HMRC enquiry so that innovative businesses recoup all of the money they are owed.
The future of the planet is dependent on advancing agricultural practices and only by having access to all available funds will we be able to keep the world fed.
This is why we are working alongside innovative businesses and accountants to support R&D tax relief claims from the agricultural sector.
To ensure that R&D in the agriculture sector is not overlooked, speak to our team today for help compiling fully compliant R&D tax relief claims.
Sign up to our Newsletter
Stay ahead with the latest R&D tax insights, funding updates, and innovation trends — straight to your inbox.
