R&D tax relief? Take a trip down to the farm

Businesses that believe R&D tax relief is only available to high-tech companies are being urged to take a trip down to the farm to see what they are missing.

Preston-based accountants and business advisory practice WNJ says its work with Farmer Ted’s Adventure Farm in West Lancashire highlights how the scheme is available to companies in any sector.

Farmer Ted’s 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.

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.

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 said: “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’ve put a lot of time and money into making sure that the new attraction is a hit

“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.”
 
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. 

Paul Woodburn, partner at WNJ, which is based in Preston, said: “R&D tax credits are a form of corporation tax relief. 

“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.”

He added: “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.”

He added: “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.”

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