R&D tax relief in agriculture

Many businesses operating in the agricultural industry are unaware they are eligible to receive R&D tax credits from the UK government.

There are certain endeavours that are carried out in agriculture that directly qualify for the tax credit. Other major sectors that have benefited from R&D tax reliefs in the UK include livestock and fertiliser companies.

Aspects of agriculture that are eligible for R & D tax credit

The agricultural sector contains multiple activities that qualify for agricultural R & D tax relief. Tough margins in the sector often mean that R&D tax relief is a vital source of income for many of these businesses. The major agricultural areas that are eligible include:

Reusing of waste energy in the form of biofuels

Development of new crop strains

Development of new feeds for livestock

Implementation of smart irrigation techniques

Improvement of breeding techniques for livestock

New qualifying agricultural areas

Some new activities in the field of agriculture that qualify for the agriculture R & D tax credit include:

Genetically designed food

These are food products that are modified using different DNA components from a plant or animal. There is a high level of technology that is required to extract strains of DNA from plants and animals. This activity is carried out in specialised sections such as labs where high technology levels are needed. Injection of R & D tax credit into such productions will lead to an increase in the output.

Closed ecological systems

This is an advanced form of agriculture where there are no interactions with the outside environment. For example, the waste products must be converted to useful forms e.g production of bio-fuels. Investment in this sector will promote sustainable farming.

Reduction in waste

Injection of the R & D tax credit will ensure the amount of energy wasted in agriculture is reduced. Water wastage in the irrigation sector will be reduced by installing smart irrigation schemes.

Livestock biometrics

This is the process of identification of the animals that are on the farm. This aids in feeding the animals and marking the animals that are in the gestation period. Tags on the ears with numbers or names are used for this purpose.


This relates to the distribution of seeds which have been correlated to an exact mapping of a field. This innovation attempts to improve the accuracy and efficiency of seed dispersal by utilising distribution and mapping technology.

Vertical farming

Vertical farming is the practice of growing food in vertically stacked layers indoors. By stacking vertically rather than laterally, farmers can radically increase their output per square foot. 

By containing these vertical farms indoors, farmers can control the environment completely, by controlling elements such as light levels, temperature, and moisture. It also allows farmers to reduce the use of pesticides, since it is easier to stop insects entering. 

Many vertical farmers experiment with techniques and processes to improve yield and flavour while reducing cost.

Soil management

In agriculture, the soil is key to both animals and crops. Overusing inorganic fertilisers leads to depletion of the important components of the soil. Injection of R & D tax credit will ensure the production and use of the organic fertilisers are achieved by more farmers.

New technologies

In agriculture, new technology is of importance in both livestock and crop production. Artificial insemination in livestock is the latest technology in the field of agriculture. Injection of R & D tax credit in this sector has improved the technology, leading to enhanced productivity.

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