Agricultural businesses are missing out on an average of £49,000 a year in tax relief, according to a leading tax specialist.

Data from HMRC shows the average claim in R&D tax credits in Wales is £58,000 a year with Welsh businesses claiming £170million across all sectors.

Tax specialist Karen McCann from Access2Funding points out that the agriculture, forestry and fishing industry contributed approximately £10.4billion to the UK economy in 2019.

What’s more, over the past five years it has become the fourth fastest growing sector in the UK, with the number of UK businesses in the sector growing 3.4 per cent per year between 2015 and 2020 to 14,774.

"Despite this, figures released by HMRC show that in the tax year 2019/2020, the industry received just £55million – or 0.7 per cent – of all the R&D tax credits provided by the government," she said.

“Whilst the UK has set a world-leading net zero target to end our contribution to greenhouse gas emissions by 2050, innovation has been present in the deployment of a wide range of low-carbon technologies within the agricultural sector.

"Furthermore, Brexit will continue to have an effect on the industry, meaning change and innovation is present with new machinery and techniques being developed constantly. This is reflected in the 15 per cent increase in the number of R&D tax credit claims for the agriculture, forestry and fishing sector in HMRC’s 2021 report.

“With a total of 14,774 businesses in the UK agriculture, fishing and farming sector and only 1,120 making an R&D claim, this means there are almost 14,000 businesses that could be eligible for R&D tax credits, and ultimately, aren’t claiming.

"We hope to raise awareness of innovation within this sector and encourage businesses to consult a specialist to see if their work qualifies for R&D tax relief. The money received can be reinvested in staff, training and new projects."

In Wales there were a total of 2,940 claims across all sectors, totalling £170m. The average claim value was £58,000.

For further information on HMRC’s report and a breakdown of key takeaways, visit the website at access2funding.co.uk