TIM Croft , Head of R & D for Azets , the fast-growing global accounting , advisory and business services group , looks at some of the challenges facing the agricultural sector when it comes to R & D Tax Relief

“ It is crucial that the Farming community get the support they deserve from HMRC to reward them for their innovation . Farming is at the heart of what the legislation is about , however we are seeing significant activity by unscrupulous boutique firms who see a way to make a fast buck . This is not only unfair to those who do qualify but could also in some cases prove illegal . I would ask any farming business to be very wary when considering if they qualify . If in doubt , please refer back to someone you can trust and certainly who follows the PCRT . It might seem “ money for nothing ” but the potential outcome of being under scrutiny for misfiling could be catastrophic and ultimately put the business in severe jeopardy ”. The agricultural industry has always embraced technology and change . Speed the plough says it all !

R & D Tax Relief is an excellent route to cash for businesses that are innovating and taking financial risk to make improvements in their industry and to their processes . Agriculture is a prime area for claims , and we see plenty of opportunity for farmers where they have qualifying activity . Such as , but not exclusively these could include :

• Development of fertilizers , and improvements to existing formulations

• Improvements to processes such as product safety , disease and waste reduction

• Development of new techniques to grow crops and improve quality

• Development of new agricultural machinery , GPS and Drone technologies

• Systems automation and use of Artificial Intelligence to improve efficiencies

• Improvements in pest control

• Enhancement and adaptation of various growing conditions

• Development of processes to improve product safety

• Work carried out to reduce water pollution , environmental advances , sustainability and biodiversity

Inevitably , where there is significant cash and tax relief available , there is also the opportunity for exploitation by predators in the market . There are many advisers in the market place who are professional , reputable and work closely with their clients and with HMRC to ensure legitimate claims are made . Sadly , there are also a number of businesses out there , masquerading as professional advisers , who will encourage Farmers to make a claim , even where no qualifying R & D exists .

HMRC are taking more interest in identifying non-qualifying claims and will take severe action against any claimant who makes such an application .

Currently the Farming community is being subjected to a raft of cold callers from so called R & D specialists who purport that just from being active in agriculture will result in a successful R & D claim and a route to cash . In most cases this is not true .

To qualify for relief the Farmer must be undertaking an advance in science or technology through the resolution of a technological or scientific uncertainty . Advancement of one ’ s own knowledge is not necessarily a qualifying activity . There is no doubt that the agricultural community do undertake qualifying activity and it is essential that the tax relief is given to the right Farmers and not

just the general Farming community as some specialists would have us believe .

It is vitally important that any Farmer making a claim by using a specialist consultant is aware of the qualifying activity rules , they are certain they meet them and that they have evidence to support their claim .

Do come and talk to us at Azets . We know your business and have expertise in agriculture . The R & D Tax Credit relief is generous and there to help innovative business . But also beware approaches that you receive , whether by mailshot , cold call or through “ a friend of a friend ”. If something sounds too good to be true it probably is .

Enquiries to Azets Group 01204 551 100