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Claiming R&D in Construction

News article from Inspired Tax Incentives
Article posted: 25/01/2021
Claiming R&D in Construction

The latest statistics published by HM Revenue Customs reveal that the number of R&D claims made on behalf of the construction sector has increased in the last year. A total number of 3,055 R&D claims were made last year, compared to 1,790 the year before, a rise of 71%. Firms are now becoming more aware that the core problem solving initiatives they are undertaking in their everyday work, if sufficiently technically challenging, can be classed as qualifying R&D activity. 

This has been evidenced by a total payout of £175m in the form of tax credits to the construction sector last year, which was almost double £90m paid out the year before. These figures clearly demonstrate that construction R&D is on the rise.

Crucially however, the R&D intensity does not match the number of firms within the UK. With over a quarter of a million firms all over the UK, and the construction sector only representing 6% of all claims in the R&D scheme.

Eugene O’Neill, Managing Director of Inspired Tax Incentives says, “while R&D claims in the construction sector may be on the rise, there are still many construction companies failing to benefit from the scheme and potentially missing out on substantial tax credits.”

At Inspired we are encountering qualifying R&D activity across a wide range of areas within the construction industry, areas such as; Design & Build contractors, Piling specialists, M&E providers, Civil engineering projects & Remedial works specialists. Clients are routinely having to react to complex issues whether that be during design phases of projects or when sites become live and operational.

Under the SME scheme a Company can receive a benefit of 24.7p per £1 of qualifying R&D costs or up to 33p per £1 if loss making. For the RDEC scheme a Company will receive a net benefit of 10.5p per £1 of qualifying R&D costs identified.

If you believe your Company could be availing of this generous tax relief, please get in touch and our specialist advisors can help assess your potential qualifying R&D activities.    

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