R&D Tax Credits in Agriculture: What Qualifies and How to Claim (2026)

Research & Development in agriculture? It sounds like a lab-and-lecture-theatre thing — but R&D happens on farms every day across the UK, and most farmers don't realise that what they're already doing may qualify. If your business is a limited company, that can mean a reduction in your Corporation Tax bill, or a payable cash credit.

This guide covers what counts as R&D on a farm, how the current merged R&D scheme and ERIS work, what costs you can claim, and how to put together a claim that holds up to HMRC scrutiny.

Defining R&D in Agriculture

R&D expenditure covers money spent developing or improving products, processes, or services. In agriculture, that could mean work to increase the yield or quality of crops or livestock, or to create conditions in which a new product or technique can succeed where it hasn't before.

The tax definition of R&D is set out in HMRC's manual at CIRD81900, which reproduces the government Guidelines on the meaning of R&D. There are two tests to meet:

1. Technological or scientific uncertainty

There needs to be an uncertainty that had to be resolved to reach the desired outcome — some issue, question, or puzzle worked through along the way. Importantly, the uncertainty must not be one a competent professional in the field could resolve with a short conversation.

For example: if a farm had a disease outbreak and a competent pest control specialist recommended a viable, known treatment, that's not R&D. But if no readily available solution existed and different approaches had to be trialled to resolve it, that's a strong candidate. For a real-world example, see how a dairy farm claimed £145,000 in R&D tax credits.

2. An advance in science or technology

Resolving (or attempting to resolve) the uncertainty must lead to an appreciable advance in scientific or technical knowledge — an advance in the field generally, not just new to your business. Work with unusual livestock breeds, plants, feeds, pesticides, energy capture systems, or general improvements where the outcome is genuinely uncertain can meet this test.

Related technical areas include agronomy, nutrition, propagation and breeding, disease and pest control, energy efficiency, automation, drone and GPS technologies, storage, and processing — there's a lot of scope for a qualifying project here.

For a fuller walk-through of the two tests, see our guide to qualifying R&D activities under HMRC's guidelines.

What costs qualify

Once a project meets the two tests, several categories of cost can typically be included in a claim:

• Staff costs — salaries, employer's NIC and pension contributions for people directly working on the qualifying project (e.g. time spent on trials, data analysis, or developing a new process), apportioned to the R&D time spent.
• Subcontracted R&D and externally provided workers — agronomists, consultants, or specialist testing labs brought in to work on the qualifying uncertainty.
• Consumable items — materials, feed, or supplies used up or transformed during trials (not items that end up being sold as part of normal output).
• Software and data — licences and cloud/data costs used directly for the R&D, such as modelling or monitoring software.
• Utilities — a proportion of power, water, or fuel consumed directly by the qualifying work (e.g. running specialist equipment for a trial).

One point worth flagging: since April 2024, qualifying R&D generally has to take place in the UK, with limited exceptions (for example where the necessary conditions genuinely don't exist here). If any of your trials or specialist testing happen overseas, it's worth checking this before assuming the costs qualify.

How relief is calculated

For accounting periods beginning on or after 1 April 2024, most companies claim under the single merged R&D scheme, which gives a 20% above-the-line expenditure credit on qualifying costs (taxable, so the net benefit is lower after Corporation Tax).

Loss-making, R&D-intensive SMEs can instead claim under the Enhanced R&D Intensive Scheme (ERIS): if your qualifying R&D spend is at least 30% of total relevant expenditure (the threshold for periods beginning on or after 1 April 2024, per CIRD123000), ERIS gives a more generous payable credit. Smaller, specialist farming or agri-tech operations running trial-heavy projects can sometimes hit this threshold — it's worth checking your intensity ratio rather than defaulting to the merged scheme. See our guide to the merged RDEC and ERIS rules for the full mechanics.

Can you Claim for your Agricultural R&D?

If you've undertaken work to enhance or develop new products, processes, or services, and the uncertainty and advance tests were met, you've been conducting R&D. There are a few conditions — the work should have been conducted by a British limited company. Even if the work took place a while ago, you may still be able to claim, as long as it's no more than two years since the end of the accounting period in which the work took place.

Claims also need to be submitted alongside HMRC's Additional Information Form — see our guide on completing the AIF form for what's required.

If you think you might have a claim, or even if you have some work you've done that you want to discuss — we're here to help. Agriculture is one of the areas that Zest specialise in, and we'll meet with you to discuss your claim free of charge with no obligation to proceed.

So, what are you waiting for?

Frequently Asked Questions

Does everyday farm improvement work count as R&D?

Not automatically. Routine changes with a known, readily achievable outcome don't qualify — there needs to be genuine technical uncertainty that couldn't be resolved by a competent professional in the field.

What's the difference between the merged scheme and ERIS for a farming business?

Most companies use the merged scheme (a 20% expenditure credit). Loss-making SMEs whose qualifying R&D spend is at least 30% of total expenditure may instead claim under ERIS, which is typically more generous for R&D-intensive businesses.

How far back can I claim?

You can claim as long as it's no more than two years since the end of the accounting period in which the R&D work took place.