R&D Tax Relief for the Construction Sector

Construction worker

 

Your construction company could be missing out on valuable tax relief, or a repayable cash tax credit if you are loss making.

Around 1,300 companies in Yorkshire and Humber alone file Research & Development (“R&D”) tax relief claims with HMRC, representing around £55m of tax savings each year. Claims by the construction sector account for only around 2% of R&D claims nationally, yet aspects of many construction sector firms’ work can be similar to manufacturing and from which sector nearly 30% of R&D claims spring. This means that you may be overlooking extra relief.

Your key criteria for extra tax relief may be if you use novel materials, tools, or techniques whose development includes overcoming some technological uncertainty, and which are an advancement in the industry. If their development is a prototype, and the knowledge of how to achieve that advance is not readily available or deducible by a competent professional in the industry, then there may be scope for an R&D claim which can deliver an extra 26% corporation tax relief on top of the usual 20% relief.

Areas which indicate that R&D may be occurring include:

  • Are there specialist engineers on the project, either in-house or consultants?
  • Are there stage payments due in part to having to overcome technical/materials milestones?
  • Do the contracts contain extensive indemnity and retention clauses?
  • Is prototyping involved?
  • Are materials being developed which are cheaper, greener, or more reliable; or new combustive or fire retardant materials?
  • Is there development of new materials, tools, or evaluation of existing materials/technology, combinations and adaptations of existing materials and products, or binding methods or coatings which haven’t been used in the market before?
  • Are there new production techniques, including new modular off-site fabrication methods and which make the erection of buildings more efficient and accurate?
  • Have there been advances in software to resolve challenges?

If you think that the above apply to you, please get in touch with one of our R&D experts to discuss if you qualify and the benefits this will have to your business. Alternatively, fill out our contact form below:

Angela Mikola – amikola@garbutt-elliott.co.uk / 01904 464 157

Adrian Widdowson – awiddowson@garbutt-elliott.co.uk / 01904 464 150