Hidden within the construction sector is a surprising amount of innovation.
And the businesses carrying out this research and development (R&D) activity are entitled to a generous reward from the government’s R&D tax incentives.
R&D tax credits are not something you should put off for another year. With small- and medium-sized businesses receiving £53,876 on average, and large companies getting £272,881, the cash they deliver can be invaluable for driving growth in a business such as yours.
If you needed further incentive, think about how you might invest this money. Imagine a reliable cashflow from an established and credible source. Reinvested back into the business, a virtuous circle of innovation can take hold.
The cash could help you overcome challenges such as supply chain complexity and the expense of raw materials, and it could assist you in finding new technicians with the skills you need.
R&D tax incentives represent a significant opportunity for the construction industry. Just 1,570 claims were made in 2017-18, representing fewer than 1 per cent of the UK’s construction businesses.
While it is unlikely all companies would be eligible, some certainly will be.
One reason many businesses are missing out is because they do not appreciate that what they are doing counts as R&D.
But construction is full of challenges that require inventive solutions. R&D activities usually relate to the innovative use of materials or overcoming problems on site.
So, if you are experimenting with new or improved materials, or building processes and techniques, it’s likely your business could benefit.
“It is time construction firms were properly rewarded for their innovation”
I have seen R&D in all of the different types of construction firms; structural-, civil- and electrical engineers; materials experts and suppliers; HVAC businesses; housing developers; architects and construction manufacturers.
A recent, fascinating example of R&D concerned a company that was asked to supply the mechanical and electrical services for a facility that carries out neurotrauma research.
The facility had to remain fully operational while the new systems were installed, so a temporary HVAC system had to be developed as a workaround.
You might consider overcoming this type of technical challenge to be just everyday activity, but the impact for the research facility was profound.
It is time construction firms were properly rewarded for their innovation. Introduced in 2000, R&D tax incentives are an established and valuable source of funding that you cannot afford to ignore.
Jenny Tragner CA is technical director at ForrestBrown and holds a seat on the HMRC R&D Consultative Committee
Contact Jenny on 0117 926 9022 or email email@example.com
For more information, visit forrestbrown.co.uk/who-we-are/sectors/construction