Agricultural R&D Tax Credits: The Overlooked Opportunity

Most UK farms are doing far more R&D than they realise – but almost none of it is being claimed for under the R&D tax relief rules.

Agricultural businesses are investing heavily in new farming systems, breeding programmes, precision technologies and sustainable practices. Yet agriculture remains one of the least represented sectors in R&D tax claims. The main reasons:

• Most R&D advisers don’t properly understand farming
• Most farmers don’t recognise their innovation as “R&D” in the HMRC sense

With post‑Brexit policy changes, ELMS, and the move away from BPS, UK agriculture is being pushed into a new era of innovation. If you’re developing new ways of farming, processing or managing land, there’s a real chance you’re doing qualifying R&D.

What Does Not Qualify as R&D

The following activities, while skilled and often costly, do not meet the statutory R&D definition on their own:

• Standard farming operations – ploughing, drilling, spraying, harvesting, livestock husbandry and routine crop management using established methods and off‑the‑shelf equipment
• Routine use of precision agriculture – running GPS‑guided tractors, drones or variable‑rate kit using manufacturer settings and standard protocols
• Standard crop trials – testing commercial seed, fertiliser or crop protection products in line with supplier recommendations where results are broadly predictable
• Adopting known best practice – implementing organic, regenerative or IPM systems that are already well‑documented in public guidance and technical literature
• Standard veterinary and husbandry work – routine health plans, established AI protocols, and nutrition based on published feeding tables
• Commercial deployment of established technology – installing solar, wind, AD or other proven technologies to standard engineering designs
• Regulatory compliance – environmental monitoring, waste management and statutory reporting using known methods

Per CIRD81900, the same test applies in agriculture as in any other sector: there must be an attempt to achieve an advance in science or technology by resolving a scientific or technological uncertainty that a competent professional in the relevant field could not readily resolve from existing knowledge.

The core question is:

Did you face a problem that existing agricultural science and technology couldn’t solve?

What Genuinely Qualifies as Agricultural R&D

R&D arises where farmers, agronomists, scientists and engineers tackle problems that cannot be solved using standard methods or published knowledge.

1. Precision Farming Systems