Revealing the Potential of R&D Tax Relief in the Construction Industry
Published 12 May 2021
Before getting in touch with Recoup, this firm was one of the many construction companies leaving millions on the table in missed R&D tax relief. Learn what we did to make this well established firm’s first claim a simple and painless process. Also discover what the Director, had to say about his experience working with us.
A little about the firm?
This firm is a established construction business carrying out work in the commercial, retail and industrial sector.
It works with customers from a build and design perspective, catering for a range of requirements including full turnkey projects from inception to completion with insurance warranted design.
Such projects are executed by a team of highly experienced and trusted contractors – often led by the firms recently appointed Director.
Building better customer experiences
There are lots of opportunities for construction companies to revolutionise the work they do through research and development, and in the process, deliver faster and easier experiences for their customers.
The firm has been leveraging these opportunities for a while now, showing the industry how it’s done. Most often its innovative activities stem from solving tricky customer problems by pushing the boundaries of conventional solutions.
For example, a recent industrial client wanted to create a loading facility to fulfill a new order. Problem was, they had no space for the build. So it was up to their team to design and construct an unconventional type of loading facility to overcome such limitations while also ensuring consistent productivity for the client.
Such work required plenty of experimentation and thinking outside the box, putting it firmly in the R&D realm.
What’s more, the senior management regularly hires structural engineers who use innovative software to speed up its building process. The software used also helps the business honor the warranties it provides through preventative risk management. Again, all the costs associated with this, including subcontracting fees, are typically eligible for R&D tax credits.
First R&D claim
Prior to connecting with Recoup, the firm had never put in a claim before. In fact, our client wasn’t aware of R&D tax relief in the first place like so many business owners we encounter.
It was Claire Leaman of Bee2Bee Consulting who put the client in touch with us. Then it was our job to demonstrate the impact R&D tax credits can have on his business.
Working closely with our chartered tax advisors, we helped our client draw out past projects that could be eligible for R&D tax relief. We also illuminated the costs the firm could claim for, including:
65% of the hiring subcontractors costs
materials and consumables that are used up by the R&D process
certain types of software used to drive efficiency
Finally, we explained to our client what financial information we would need to put in a claim, such as a list of the business’ CIS contractors and full accounts for the last two years. As soon as we collected that information, the chartered accountants could put in the claim, marking an end to the director and his team’s input.
Here’s what he had to say about our process.
“As straightforward as you could get”
“I really appreciated how simple Recoup made the process,” explained our client. “They knew exactly what questions to ask to draw out the right information, minimising the time I spent on the call.
“Recoup also answered any questions I had around R&D with simple, easy-to-understand explanations. I went into the call with zero knowledge about the tax relief scheme and came away feeling highly informed,” he continued.
Our client did highlight how the process is much easier when you’re organised, “Your main responsibility is getting the right information together. Recoup made it easy to understand what we needed. How much time you dedicate to getting that information depends on how good you are at bookkeeping in the first place!”
R&D tax credits: a strategic tool
Approximately eight weeks after our clients first call with us, he received a successful outcome. But how has the business used its R&D tax credits?
“We have reinvested the funds into the business as part of our working capital,” our client told us. He also said, “We’ve included R&D tax as part of our accounting process moving forward owing to the success of our claim.”
He continued, “I’m confident it will help us grow the business organically as we deliver more successful projects through this extra funding and innovative research. I want other businesses to benefit too, which is why I’ve recommended Recoup to other companies since putting in a claim.”