For those working within the construction industry, you will know that this is a challenging sector that often requires innovative solutions. As R&D activities go hand in hand with innovation, there is a clear link between R&D and construction.
R&D tax credits for the construction industry are a great way to mitigate any losses when undertaking innovative and inventive solutions. There are a range of construction projects that can qualify for R&D tax credit claims, with the most common ones being; working with new or improved materials and new processes and techniques.
Construction projects that may qualify for R&D tax relief include:
- Groundwork and substructual issues;
- Environmental issues;
- Parking and transport issues;
- Energy efficiency of homes, how this was achieved;
- Planning conditions imposed by local authorities and how these were overcome;
- Any modular build element;
- Making properties disabled-friendly;
- How space was maximised in a project;
- Any issues with services on site; or,
- Any conservation/listed building issues.
What activities can be included in a R&D project?
- Overcoming challenges and uncertainties;
- Designing and making products;
- Suggesting a more cost-effective process;
- Suggesting a more time-efficient process;
- Time spent researching and development of current projects;
- Seeking to improve processes, services, materials or devices;
- Production of prototypes or performance testing;
- Development of software or IT solutions;
- Investment in failed projects or developed products that are never launched/used;
- Efficiency of product, process or service, or;
- Employing any staff of a highly skilled background or with technical or scientific background.
What expenditure can be claimed for in a R&D construction project?
- Staff Costs – PAYE employee costs (salary, national insurance and employer pension) are apportioned for their time spent on the R&D project plus any reimbursed associated business expenses;
- Subcontracted R&D – You can claim 65% of what you paid your subcontractor in respect of R&D activities;
- Software – Purchased for R&D purposes and costs apportioned for any subsequent use;
- Utilities & Consumables – Water, fuel, power, wastage material and material used in the project, or;
- Prototypes – Produced for R&D purposes.