R&D Tax Relief in the Construction Industry

In 2017 it was reported that the construction industry contributed £113bn to the UK economy. As one of the large drivers behind the UK economy, it is surprising how little is claimed back by construction businesses through Research and Development (“R&D”) tax relief.

Although Innovative activities are taking place every day in this industry, recent statistics show that less than 2.5% of all R&D tax credit claims are made from construction companies: in 2016-17, a total of 39,700 R&D tax relief claims were made with only 1,365 claims from the construction sector.

There are two R&D tax relief schemes that companies can claim under – the SME scheme and the large company or RDEC scheme. Both are beneficial to companies in either reducing a tax liability or creating a payable tax credit.

To claim for R&D tax relief a company must be trying to achieve an advance in science or technology with activities that directly contribute to the resolution of scientific or technology uncertainties.

In the construction industry this could, for example, be research into health and safety advances, building information modelling and difficult ground conditions. It should also be highlighted that projects do not have to successful to claim for R&D tax relief.

How can AAB help?

• Establish whether your company qualifies for R&D tax relief;
• Provide advice on the requirements for supporting documentation and records;
• Work with you to prepare and submit claims to HM Revenue & Customs.

To find out more please contact Jenna Mcdonald (jenna.mcdonald@aab.uk) or your usual AAB contact.