Why is R&D important in the construction industry?
Now more than ever, Research & Development plays a huge part in the accelerated growth of the construction industry and its sub sectors. The government has been rewarding innovative companies with R&D tax credits for almost 20 years now, and the construction industry is anything but exempt from this. In fact, the sector still remains one of the largest industries to be taking advantage of the scheme year after year.
Quite often, when a business in this industry is making an R&D claim, they can expect a fairly decent amount back due to the large amount spent on projects. A percentage of staff time, subcontractor costs and material costs can all be considered when making a claim; and combining these all together often leaves companies with a sizeable figure. For example, if a business has £100k in qualifying expenditure, they can expect anywhere between £26k and £33k to be either paid back in cash or knocked off an existing corporation tax bill. This is an invaluable amount that businesses can use to reinvest in their business for purchasing of new equipment or for taking on more staff.
What qualifies for R&D in the construction industry?
There’s a really common misconception in the construction industry of “That’s just what we do, I don’t think we qualify” but in reality, that’s not the case. Construction is full of technical challenges that require innovative solutions. Below are some examples of what could qualify, but there are plenty more beyond these:
- Modifying existing components into bespoke projects.
- Solving technical problems both during and after construction.
- Meeting regulatory requirements when working on listed buildings.
- Creating or improving tools and equipment used in the industry.
- Experimenting with new materials.
- Redesigning to improve performance, safety, carbon footprint or quality.
- Integrating mechanical and electrical systems into a build.