Claiming R&D tax credits for your construction firm
When it comes to research and development, the construction industry is at the forefront of innovation. But many firms are missing out on R&D tax relief, an incentive that the government has been actively encouraging businesses to take advantage of since 2000. With an average claim under the SME scheme being about £46,000, construction companies could be reaping the rewards of their endeavours – so why aren’t they? In this post, we’ll explore the advantages of R&D tax credit for the construction industry.
Why are construction firms eligible?
R&D in construction companies is more or less part of the day-to-day activity. Each project, whether in a city centre or out in the countryside, throws up a set of unique problems that need solving. Finding a solution inevitably leads to the possibility of improvements elsewhere, and it’s this that the government wants to reward. R&D tax credits in the construction industry could be awarded for:
- The development of greener or safer ways to work
- Finding new ways to tackle common problems
- Designing more efficient tools or equipment
- Developing innovative architectural designs
As long as the firm is registered to pay corporation tax in the UK, has fewer than 500 employees and an annual turnover of less than €100 million, engaging in the above practices offers a strong chance of making a successful claim.
What’s the rate of reward?
Research and development in construction could be highly rewarded, with businesses meeting the above criteria able to recoup significant sums. As long as the work you’re undertaking contributes to an advancement in scientific or technological knowledge, with benefits extending beyond your firm into the wider industry, you could recover up to 230% on your R&D costs.
Simply put, for every £100 spent on your R&D project, you can recoup that plus an additional £130. For many construction firms, that would mean a substantial reduction in their corporation tax bill.
The good news is that even if the work you’re undertaking doesn’t prove successful, you can still claim for the tax credit – the government seeks to reward efforts rather than positive results.
Don’t miss out
Rather than seeing your activities simply as part of the day job, it’s worth taking time to explore whether they qualify for R&D tax relief.
At R&D Tax Solutions, we work with businesses in a range of industries to ensure they can maximise the value of their claims. We can help you to identify the costs and documentation that will form the basis of your claim, assist with the process and liaise with HMRC on your behalf, meaning you can continue to focus on the important work you do.
For more information on R&D tax credits in the construction industry, or to find out how we can help your business make a claim, contact us on 0161 298 1010 today.
