Why you don’t think your construction business innovates
There are a few reasons that businesses in the sector may not immediately consider themselves innovators, and why many activities that could be classed as R&D might go unrecognised.
Without being able to recognise or communicate what you’ve been able to achieve through R&D it’s unlikely you’ll make a successful claim for R&D tax relief, which could mean you’re missing out on tens of thousands of pounds of funding.
Take a look at a few of the reasons you might not have considered your business as undertaking qualifying R&D activity.
1. Natural business growth
The most tangible way to recognise growth in a construction business is to see the scale and complexity of projects increase as the business gains reputation, recruits more people, develops specialisms and/or invests in bigger and better equipment.
In order to scale up, tried and tested techniques need to be reviewed and adapted in response to this natural business growth, and it’s at this stage that R&D might take place.
When thinking about what qualifies as R&D for the purposes of claiming R&D tax relief, a project or even an everyday challenge that takes existing methods and adapts them to facilitate a different or larger project could count.
Take a look at our qualification decision tree to see if anything you’ve worked on could provide you the opportunity to claim back tax.
A real barrier to claiming for research and development tax relief is the ability of businesses to communicate the complexity of projects in a way HMRC can understand.
We employ both technical analysts and tax specialists who are experts at identifying both qualifying activity and eligible costs.
These technical analysts have a background in the sectors with whom we work and can clearly communicate this activity in a way that ticks all the HMRC boxes.
We like to spend some time with you at the discovery phase to make sure we’ve uncovered everything properly.
It’ll be more than just one phone call, but working with a specialist like us will still be quicker than filing the claim yourself.
What’s more, we’re great at uncovering hidden costs that you can claim on that other advisors without the sector-specific knowledge might miss.
To get a better understanding of what costs you can include in an R&D tax relief claim, download our new guide and checkout page 13.
One of the best qualities of the sector – the ability to take challenges in its stride – is also one of the most damaging when it comes to understanding why construction businesses don’t think they undertake R&D.
Often activity that happens is seen as ‘just part of the job’ when a whole load of expertise, innovation, research, and development has actually gone into achieving a goal.
Tackling complex challenges and finding new and innovative ways to do things isn’t just part of the job – it’s advancing science and technology and being at the forefront of innovation.
The R&D tax credit scheme is designed to reward this work, so make sure you claim relief on the costs you’ve incurred.
4. Time and process
We know that the best place for construction leaders to be is in the business, getting things done. When challenges like Covid-19, Brexit, sustainability targets, access to skilled workers and more hit, it’s hard to justify spending time on things like filing tax relief claims, especially when you’re not convinced you’ll get anything in return.
And we know it’s not an easy process. We’ve worked with many clients who have tried to file a claim themselves but who have given up, or not been successful.
There is best practice when it comes to communicating with HMRC that helps processes go smoother, and submit water-tight claims in a timely manner. That’s where we come in.
We wouldn’t expect to do your job, so why should you be expected to do ours?
If you’re unsure about your eligibility for research and development tax relief, take a look at our new guide: Funding construction sector innovation with R&D tax credits.
It’ll help you understand what R&D tax relief is, how you might qualify and what costs you can claim against.
The average research and development tax credit pay-out is £63,000, so can you really afford not to explore this vital source of funding further?