Despite the fact that there are over 250,000 SMEs within the construction industry in the UK alone, HMRC’s latest available figures show that only roughly 1% have claimed research and development (R&D) tax relief. Here at Lumo, we’re asking why.
R&D tax credits - a government funded financial subsidy to support any project pursuing innovation - provide an ideal opportunity for construction companies to claim back some of their expenses.
And more often than not, construction businesses may qualify for R&D tax relief without even being aware of their eligibility. So, today, we’re offering up 3 reasons your construction firm should look to explore the potential research and development avenues at your disposal.
Perhaps one of the main reasons so few construction firms claim R&D tax relief is they’re unaware of their eligibility.
To be considered for R&D tax credits, you must be able to prove you’ve attempted to innovate in the face of scientific uncertainty. Many construction firms may fall at this hurdle by believing their innovation is part of their everyday work. But the fact of the matter is that many construction projects utilise creative innovation and, subsequently, many are potentially eligible for R&D tax relief.
This doesn’t mean you have to swap the high-vis for a lab coat. On the contrary, if a construction business is investing in a project to try and resolve an on-site issue, or provide a quicker, safer, cheaper or more efficient means of delivery, you may qualify.
It could help your business grow
Providing you’re eligible, R&D tax credits can be claimed to cover a percentage of any associated expenditure. Given many qualifying R&D projects within the construction industry are costly projects, this often entails a significant sum of financial subsidies.
With this in mind, the funding you receive from R&D tax credits can be a substantial cash injection to help your business grow. And we’re talking in terms of both profit margins and capabilities here.
With an increased cash flow, your construction industry has the income to further expand your capabilities in everything from your supply chain to your workforce.
You could become an industry leader
The reasoning behind HMRC’s R&D tax programme is simple: by offering a monetary incentive, British businesses will strive to innovate, driving the industry forward with those British companies at the helm.
When it comes to the construction industry, it’s no different. From more efficient processes to more sustainable performances, pursuing R&D projects can help the everyday practices and capabilities of the construction industry to evolve - meaning both you and your industry will reap the benefits for years to come.
It’s time your construction firm explored its R&D eligibility. For a helping hand getting started, and expert advice on the application process, get in touch with Lumo today.