Construction based R&D claims are still disproportionately low.

Construction is the third largest industry in the UK and generates over £118bn a year in revenue, but recent HMRC figures show less than 5% of R&D tax relief claims are from the construction sector.

So why is this huge sector only claiming £235m through the scheme?

In the 2018/19 tax year SMEs and large companies have, to date, filed 3,340 claims. That is only around 1% of the companies registered in construction fields.

These figures suggest that there are potentially a couple of problems leading to poor uptake. Potentially, there is still a lack of awareness of the scheme generally and, or more likely, that many companies are quickly dismissing the possibility that they might qualify for a ‘research and development’ claim, without giving much time to look into it.

One of the major causes of companies disqualifying themselves, and a general barrier to the construction sector anyway, is HMRC’s language when describing eligibility.

Construction relies on ‘problem-solvers’ rather than ‘innovators’. ‘Making things work’, rather than ‘researching and developing methodologies/techniques’.

The reality is that those words and phrases are often synonymous, with nothing separating them other than pompousness. But, the language difference creates an instant doubt when checking if a company qualifies that is clearly a stopping block for many.

It is time the sector takes a closer look and considers how the construction lingo used on site and the interpretation of ‘research and development/innovation’ overlap when considering a claim.

With the average tax benefit during 18/19 being £70,359 per claim, it should be the top priority for any construction company director to explore whether they might qualify or not.

Obviously, not everybody will qualify – but the current statistics suggest that too many companies are assuming they are in the disqualified list without seeking advice, and there are literally thousands of pounds being missed by companies who didn’t take an hour to explore in more detail.

Construction relies on ‘problem-solvers’ rather than ‘innovators’. 

If you’re a construction company and you’re wondering if you might qualify, then check out this quiz or one of the industry specialism pages below:

Architecture; civil engineering; structural engineering; main contracting; scaffolding; waterproofing; m&e; fit-out; general construction.