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Innovation in the ever-changing agriculture industry is the key to improving productivity and more efficient food production, as well as creating a market edge.
New Government Packages
From January 2021, the Government will begin to roll out a new package of support for agricultural research and development, in recognition of the many challenges faced by farmers and land managers such as animal diseases and pests, outdated infrastructure and unfavourable weather.
The UK’s food production industry includes livestock, poultry, fish and crops and has over 150,000 small businesses, with a broad range of activities from animal husbandry to bee-keeping, from urban farms to seed companies.
In 2020, SMEs in the agricultural sector have been particularly badly affected by the Coronavirus pandemic, with more than 90% reporting reductions in revenue.
It is more important than ever for companies in this sector who are carrying out research and development to ensure they gain the maximum advantage from R & D tax relief by claiming their entitlement.
R&D TAX CREDITS
Historically, the agricultural industry overall has not recognised the potential help available from R & D tax credits. In 2018 this sector had less than 1% of all R & D tax claims, with each claim being worth on average £41,000 as opposed to almost £85,000 in other sectors.
Many businesses in the agricultural sector are unfortunately still unaware that they can claim R & D tax credits or are aware but think that their research activity would not qualify.
The Government is changing the way it supports agricultural research and development to ensure that businesses across the industry are more productive and resilient.
From 1st January 2021, The Department for Environment and Rural Affairs (DEFRA) will be making a gradual transition over seven years to a new financial support system for farmer-led research.
This will be a move away from a subsidy-based approach to a more business-like partnership, aimed at enabling farmers to collaborate with research organisations to come up with new technologies and ideas that will make a real difference to our lives.