Is The UK Construction Industry Missing Out On Millions?
The statistics published by HMRC show a big increase in the number of companies claiming R&D tax credits, but the construction sector is still missing out.
The statistics published by HMRC in August show a significant increase in the number of companies claiming R&D tax credits in 2012-13, proof that the improvements in tax relief incentives are boosting innovation as intended. But some UK industries are still failing to take the bait.
The upturn in claims has been 30 percent on the last year, with 13010 SME’s claiming tax credits amounting to an impressive £600 million. This is 40 percent increase in the total value of claims in comparison to the previous year.
Manufacturing is leading the way in snapping up this tax relief accounting for 3,970 claims, generating £165 million, with other industries such as information and communications also doing very well. However the construction industry has not fared as well, with only 235 claims made, which is under half that of the admin and support services industry.
The construction industry has been known for missing out on tax incentives and grants. Last year it was reported that only 20 percent of construction firms were aware that grants to encourage innovation were available. And more worrying still is that fewer than 5 percent actually applied.
Could it be that UK construction isn’t investing money in innovation?
Having made successful R&D claims for SME’s involved in the construction industry, RIFT Research and Development know from experience that this is not the case. It seems instead that the common misconceptions surrounding R&D tax credits – which appear to have been overcome in many other UK industries – still seem to be lurking in construction.
One of the key concepts to defining what qualifies for R&D tax credits is that the business is investing in an advancement that from the outset is not clearly technologically or scientifically possible. Many industries have misinterpreted the language used in HMRC’s definition; the words science and technology all too quickly conjure up laboratories, white coats and oversized computers. But the key thing to focus on is the uncertainty of the advancement: if there’s no clear solution to the problem, then there’s a fair chance that the solution will have unique features.
Due to the nature of their work, which is governed by a whole host of variables, architects and engineers are constantly being faced with problems that require tailor made solutions. Some of these solutions may qualify as R&D. And one thing construction businesses can be certain of: it costs nothing to find out.
Get credit for your business innovation with research and development tax credits claim assistance from RIFT. Find out more about R&D tax credits for the construction industry, deep dive into the world of business innovation with our insights, or contact RIFT R&D today to find out how we can maximise your benefits.