It seems that the common misconceptions regarding research and development (R&D) tax relief which have been overcome in other industries are still lurking in the construction sector.
Whilst the majority of people working in the construction industry have heard of R&D tax relief, there is often a misconception that it is not applicable. However, the tax relief is in fact potentially available to every company in every industry.
The latest figures from HM Revenue and Customs (HMRC) indicated that out of 20,830 R&D claims across all sectors, construction claims amounted to only 480.
It would seem unlikely that these figures are due to UK construction firms failing to innovate, given that they are considered among the best in the world. Therefore it seems that the common misconceptions of R&D tax relief eligibility have not successfully been overcome in the construction industry.
This ongoing lack of awareness is significantly costing construction firms, as they are missing out on significant R&D funding, due to failing to recognise and claim their eligible R&D activities.
Below are some examples of activities that companies might undertake and which potentially qualify for the R&D tax relief.
- Innovative use of green or sustainable technology and methods
- Development or adaptation of tools to improve efficiency
- Introduction of new or alternative materials to replace and improve existing components or materials
- Fabrication of components, integration and assembly of large systems that is technically challenging and not straightforward
- Identification of technological improvements to performance of products and processes
- Prototype design and commissioning, including quality testing and final building
- Advancements in structural techniques to aid construction on unusual ground conditions
A sector as innovative as construction should be making many more R&D tax credit claims and it is essential to act quickly as R&D tax claims can go back two year end periods only.
To further discuss and find out more information about how your company can benefit from an R&D tax claim, contact one of our Swanson Reed tax credit specialists today for a free assessment. We look forward to speaking with you.