How R&D tax credits can help in the future
The tragic fire at Grenfell Tower killed 80 people and proved we cannot be safe even in our own homes. Photos, videos and independent tests prove that wrong materials were used for the cladding and exterior insulation of the building. A recent report from The Guardian stated that approximately 111 high rise blocks in UK are at risk of a similar disaster.
This is due to the use of a combination of material that failed the second of six new tests rolled out following the advice of an independent expert safety panel.The tests established that the cladding is made of aluminium composite material panels, with a polyethylene filler which “does not meet current building regulation guidance”.
What strikes most is that the Government has set up adequate funding in the form of R&D Tax Credits to help with the technical and architectural challenges of developing and testing such materials, but is the available R&D tax relief being utilised wisely for developing safer cladding systems?
As the Grenfell Tower investigation progresses, several flaws become more and more apparent:
- Local councils failed to enquire on the fire safety risks before granting planning consent for this type of cladding.
- Architects and builders, ultimately responsible for proposing, sourcing and installing the cladding materials overlooked key properties of the cladding materials.
- Worst of all, profit making has taken priority over people’s safety.
On the other side, selecting suitable cladding materials and installation technology can be a challenging process as multiple factors play a role:
- Local councils are required to run a public bid process to drive down contractor prices.
- Contractor firms need to deliver at a certain profit margin to make such projects a worthwhile business.
- Such contracts are delivered on a ‘fixed price’basis. I.e. contractors take the risk and financial hit from project delays and overruns. This often requires costs to be lowed and cheaper materials used in order to maintain project profit margins.
- Many architects and builders prefer to use materials ‘off the shelf’ which are not always fit for purpose and suitability tests are less often carried out.
The Government introduced in 2000 R&D Tax Relief, which is aimed to financially support projects where new materials and technology need to be developed.
Such projects can use and adapt existing technology e.g.
- Improving the performance of products/materials
- Advances in testing, prototype design and to resolve challenges and uncertainties of new materials
Whilst advances can be technical, e.g. to make a material lighter weight or cheaper to ensure this has a feasible commercial longevity it must also be fit for purpose. In construction, we often think about the variables of nature, e.g., wind, rain, ice but the operational variables must also be considered. What if a fire starts, how does the improved material compare to its predecessor? The adaption of materials to ensure natural, operational and user requirements are met can often be a project qualifying for R&D tax credits and R&D tax relief. For example, if we were to simply cover a material in a fire retardant, would this effect the composition of the material or its ability to fit to fit the specification of the job, if yes then often projects arise to adapt the materials or manufacturing process to enable all end requirements to be met.
R&D Tax Solutions is a tax consultancy tightly specialised in obtaining R&D tax credits from HMRC for such projects. We have assisted many architects and building contractors with such R&D projects. Our team is empowered by chartered tax advisers as well as qualified engineers to ensure such tax relief claims meet the highest standards. Contact us today at office@rndtax.co.uk or on 0161 298 1010.
