Advancements in agriculture technology are essential if we want to work alongside global factors such as population growth, rising temperatures and climate change. These challenges need to be dealt with sooner rather than later, hence the immense, ongoing need for development in agriculture technology.
The definition for which projects can qualify for R&D is incredibly broad, for a deeper understanding check out our definition here. In the Agricultural sector examples of R&D could include the production of produce such as creating or adapting fertilisers and machinery or with the care of livestock by helping to produce medication and supplements. Ultimately your project needs to recognise and identify a scientific or technological uncertainty.
Creating or improving current processes to increase crop production & yield
Creating technology to help speed up production processes and improve productivity
Creating new techniques to improve irrigation methods for decreasing crop losses
Developing ways to save space, while lowering the running & investment costs
The result of your R&D doesn’t have to be a success! Your business can still be eligible for a refund even if the project was unsuccessful!
There are five categories within Agricultural R&D claims that can be claimed back for; subcontractors, staff costs, externally provided works (EPWs), consumables and finally, heat, light and power.
Below, we have detailed how you could include these in your claim.
If you rely on a third party to help with part of the R&D process – this isn’t an issue! You can still use These claims are qualifying expenses for the R&D tax relief scheme.
A large majority of R&D Tax Relief claims involve staff costs, these costs can be encountered for staff who are involved in the R&D project either directly or in-directly.
A direct staff cost that is claimable is the expertise or advice from a competent professional, this is usually someone in a senior position in the industry that has had a direct involvement or effort in the R&D project, or a member of staff that has a defined and technical role that is actively involved in the project.
An indirect staff cost is still valuable in the process of your claim, it covers the ground of members of staff that help to enable R&D by being part of the management process or help to support the R&D taking place.
Externally provided workers (EPWs) are temporary workers on your R&D project, they are often sourced from an external agency who is responsible for their contract. The expenses spent on EPWs are still eligible for part of your claim, in fact you can claim up to 65% of tax credit relief on them no matter how big or small your company is.
A consumable item is any item that is used or transformed whilst in the process of undergoing R&D activity. It includes items such as raw materials, software licenses or even stock used in your project.
The idea is that these items no longer have any use after the project as they are so consumed by the activity undertaken and can be counted as qualifying expenditure.
The utilities that you use during your R&D activity, such as heat, light, power and water are all eligible to claim back with your tax relief claim. You just need to work out the proportion of each of them that was used during the activity.
This can be difficult to work out, however that is where we are here to help you with at Direct R&D using the knowledge and experience of our expertise advisors.