The R&D tax credit scheme has seen several revisions recently. It continues to deliver significant corporation tax savings for companies. Construction industry companies account for just 6% of the annual R&D tax credit claims, with over £175m of tax savings for the industry, but only 3,055 of the 290,000+ construction companies registered in the UK are benefitting from the incentive. Common examples of R&D tax credit claims include:
Temporary works designs for heritage sector projects.
Achieving Passivhaus or a BREEAM environmental accreditation on a project.
Improvements in waste management efficiency.
Implementation of Building Information Modelling (BIM) technology into a company.
Creation of innovative structural designs for bridges and roadway systems.
Finding unique approaches to bypass restrictions in accordance with a site’s location.
Construction equipment upgrade and development.
Green energy infrastructure design.
Projects relating to designing or building new sustainable solutions.
Developing equipment for water flows analysis.
Time spent against tendering should also be considered from an R&D perspective, activities such as value engineering, plans and designs for out of the ordinary temporary works and the outline of additional methods for reducing carbon footprint can all demonstrate an element of R&D.
The average SME construction company claim is £57,228 while the average large construction company claim is £632,931. I have advised various companies in Northern Ireland on the initiative and directed them on how to proceed with an application. In each case, the company was successful and received the benefit in the form of a corporation tax refund or a cash credit. Needless to say, they were each very grateful! To apply, you need to be a UK Limited company and subject to corporation tax. I remain surprised that more companies are not aware of the initiative.
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