FEATURE FORESTRY R&D TAX CREDITS
Claim for Your Innovation
Businesses in the forestry sector are potentially missing out on an average of £48,000 in R&D tax credit savings. Dominic Bartholdi, Head of Business Development at R&D tax specialists GovGrant explains more.
W
ith HMRC data revealing
•
that the UK agriculture, forestry and fishing sectors
Implementation of scientific biology and geology
and activity
•
Disease prevention
R&D tax credit claims, those operating in
•
Management of forestland, including use
whether they might be eligible. In the
•
UK companies are able to claim tax relief for their R&D activity. The schemes, for
•
Looking at why pollination is low over the past few years, tracking bee populations
made up just over 1% of UK
the industry are encouraged to consider
•
advancements, including hydrology,
If there’s a moment where something
of high-tech surveying and analysis tools
unexpected has impacted your land
Post-harvest advancements to process
management whether through disease,
raw materials into products
climate change, pollution or any other factor,
Hydrological and biological research.
then any time spent looking into why this
SMEs and larger companies, are both
may be the case could be qualifying R&D. Any
administered by HMRC. Typically SMEs get
Even when businesses are already claiming
machinery you’ve tweaked for working in a
back up to 33% of the amount they’ve spent
R&D tax credits, they might not have fully
woodland or park, to improve a particular
on qualifying R&D. Large companies could
explored the potential of that claim. For
function or purpose specific to its situation,
get more than 10% of their R&D spending
example, we had an agricultural client who
could be R&D. Anything you’ve tried as a way
refunded.
hadn’t considered a key project as R&D. In this
to save money or drive efficiency – whether
case, day-to-day work was carried out to monitor
it worked or not. Either way, it could be
innovation tax credit only suited to those in
the crops under specific trial conditions and
qualifying activity.
white lab coats and in digital sectors, but in
collect data, and that was time spent on R&D.
reality it’s applicable to any business that has
It was similar with indirect personnel who were
More at: HMRC data – Research and
developed and used innovation in its process.
working to enable that R&D.
development tax credits
The misconception is that it’s an
So much activity that could be considered
Here HMRC defines innovation in terms
www.gov.uk/government/statistics/
of overcoming scientific or technological
good forest management practice would qualify
corporate-tax-research- and-development-
uncertainty, something that couldn’t be
as R&D – for instance, gaining insight into growth
tax-credit www.govgrant.co.uk
worked out easily by a professional in the
conditions, discovering novel ways to improve
field. It can even be applied to for tax savings
yield or ways to save money on the management
on innovation that has failed.
of forestland. In agriculture, forestry, and fishing
There are five broad categories which
there are so many examples where we’ve seen
can classify forestry R&D claims: staff costs,
specific innovations which were all qualifying
subcontractors, externally provided works
expenditure for R&D tax credits:
(EPWs), software and consumables like heat, •
light and power. kinds are now benefiting from refinement
Tracking pests and response to different pest control processes
We know that forestry businesses of all •
Investigating new ways to use waste
through technology. R&D tax claims can come
materials in a novel bioreactor as a means
from process improvements, production
to reduce energy costs
improvement and scalability and quality
•
How different varieties of tree grow and
control. And we see this happening in all
respond in the same/different growth
aspects of agriculture, including:
conditions
Timber Trader UK Magazine
Spring 2021
26
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