Research and Development (R&D): Spotlight on the Construction Industry

Research and Development (R&D): Spotlight on the Construction Industry

In order to claim R&D tax relief, a company needs to demonstrate to HM Revenue & Customs (HMRC) that it is spending time and money trying to improve products, services, processes or systems. This improvement is attained through a technological or scientific advance that would not be easily deducible by a competent professional in their field. R&D is surprisingly widespread in the construction industry, but it is not always recognised as R&D by the businesses carrying it out as it often forms part of the company’s everyday activities.

Is your construction business carrying out R&D?

Here are some real life examples of the everyday work undertaken within the construction industry that has qualified as R&D;

  • Experimenting with new materials, either on a client led contract or in-house;
  • Modifying existing components and fittings into bespoke products;
  • Adapting and integrating new working practices in order to meet regulatory requirements e.g. fire, health and safety, energy efficiency etc;
  • Developing new, or adapting old machinery and/or equipment used in the construction process.

If your business carries out any of these activities, it is likely we would be able to make an R&D claim. Our specialist R&D team will work with you to identify the qualifying expenditure.  Tax savings can be significant and can assist with cash flow in the business, as well as be used to fund apprentices and new equipment purchases. Under the Small and Medium Enterprises (SME) scheme, R&D tax credits allow for an enhanced tax deduction of 230% of qualifying expenditure. For tax paying companies this can significantly reduce any tax bill and result in cash repayments.

If you need to discuss this further please contact Lucy Lloyd – lucy.lloyd@kilsbywilliams.com.