Are you missing out on R&D tax relief?

If you think that R&D tax relief is only available for high-tech companies employing lab-based scientists in white coats, a trip down to the farm will convince you otherwise.

Farmer Ted’s Adventure Farm in West Lancashire is now home to the UK’s only Shaun the Sheep farm attraction.

It opened its doors to visitors last year and follows a partnership between Aardman, the multi award-winning creators of Shaun the Sheep and Wallace & Gromit, and Farmer Ted’s Adventure Farm.

Themed areas at the Ormskirk attraction include a ‘camp’ for Shaun the Sheep and friends and daily shows from the much-loved screen star and his side kick Bitzer, as well as ‘meet and greets’ with photo opportunities.

Activities for youngsters include Bitzer’s Kinetic Club House, where children can pedal, push, turn and pull different devices to generate their own energy.

The three troublesome pigs from the series can be found in their pigsty. Hog Splash encourages children to catch and recycle the water that the three pigs squirt – whoever collects the most the bucket wins.

The Moles too have set up home in a huge bank of soil named Moley Moley, with tunnels leading from one side to the other, slides and molehills.

And there is Mossy Bottom Crafts where youngsters can get creative making all things Shaun – from face mask and bunting to cut-out characters from the film and TV series.

But what has this all to do with R&D? The fact is that Farmer Ted’s owners Diane and Mark Edwards were able to claim a five-figure sum in tax relief for the research and development work they carried out to ensure the new attraction would be a hit.

The team at WNJ worked with them to make the successful application to the valuable business support scheme.

And Farmer Ted’s is not alone. Figures reveal that more than 240,000 claims have been made in total and £21.4bn given since the scheme was launched back in 2000/01.

The Edwards have been running their adventure farm attraction for 16 years, and the link-up with Aardman and the development of the themed area represented a major investment for the family business.

Diane says: “When we got the chance to link up with Aardman it looked a perfect fit for the business.

“We’ve put a lot of time and money into making sure that the new attraction is a hit and that included carrying out a lot of research and development to make sure we got things right.

“We wouldn’t have known that we might be eligible for R&D tax relief if it wasn’t for WNJ. They explained to us about the scheme and then guided us through every step of the process.”

R&D tax credits are a form of corporation tax relief. They provide qualifying companies with very generous cash repayments.

So, who is eligible for R&D tax relief? HMRC has set out some clear rules and guidelines.

The project must relate to your company’s trade – either an existing one, or one that you intend to start up based on the results of the R&D.

And if your company or organisation is claiming tax relief under the SME scheme it must own any intellectual property that might arise from the project.

It is not enough to say that a product is commercially innovative. You can’t claim in respect of projects to develop innovative business products or services if they don’t incorporate any advance in science or technology.

You can’t claim R&D tax relief under the SME Scheme if you’ve been subcontracted to do the work on behalf of somebody else.

It’s also worth pointing out that your project doesn’t have to be a success in order to qualify for the relief. The fact that it failed can be used to show that its work was genuinely pioneering.

However, if your company receives a subsidy or grant for an R&D project, it may affect how much tax relief you can claim.

Gaining this support can be an important part of a business’ decision whether to make an investment that can see very real benefits for its future.

The requirements of the scheme are broad. It can include creating new products, processes or services – such as the Shaun the Sheep attraction at Farmer Ted’s – or changing or modifying existing ones.

To discuss the possibility of claiming R&D tax relief please contact me on 01772 430000