Agricultural companies in the UK continue to miss out on tens of thousands of pounds of Research and Development tax credits, according to the latest figures released by HMRC.
The research shows that despite R&D tax credits aiming to drive innovation, agricultural firms’R&D claims continue to fall behind other sectors with companies claiming a total amount of £5m in 2016.
The analysis indicates a positive trend for agricultural firms with an increase of 29 per cent in the number of claims since 2015, compared to the average for all sectors of 25 per cent.
However, it is still significantly below other sectors such as manufacturing which secured £860m in R&D tax claims and the scientific and technical sector which claimed back £635m.
Furthermore, the average received per R&D tax claim by agricultural companies was only £37,000.
Overall, agriculture accounted for just 0.5 per cent of total claims and 0.2 per cent of the total tax benefits claimed.
Lack of awareness
This research provides evidence that many agricultural companies continue to miss out on this valuable tax relief initiative.
According to one of the UK’s leading R&D Tax Credit specialist the Momentum Group, this is due to a number of reasons.
These include a lack of awareness and not understanding which activities and costs qualify for this purpose.
Momentum Group Managing Director, Tom Verner, commented: “One of the biggest issues with agricultural companies claiming their full R&D tax relief, is that many believe R&D Tax Credits are only available for traditional research sectors and ‘white coat’ industries.
“Interestingly, the statistics show that SME’s are driving the growth in claims, accounting for 81% of agricultural companies’ total R&D Tax Credit claims. This is positive for SMEs operating in agriculture which need all the help they can get.”
R&D claims are seen as important because they help encourage companies to innovate.
Mr Verner said that by not taking advantage of the available tax relief, agricultural firms risk stagnating their own growth and restricting their competitiveness.
