Rift Research and Development urges construction companies to take advantage of R&D tax credits following release of new government growth figures of 0.9%
New official figures show that the UK economy grew by 0.6% in the three months to June today. Output grew in all the sectors with construction leading the way with 0.9% growth. However, construction companies are still finding things tough and margins are being squeezed heavily in the competition for new projects. All the more reason why the sector should stop missing out on an average of £55,000 in R&D tax credits.
Rift Research and Development is calling on construction companies to take advantage of R&D tax credits following a return to growth, to help fund the drive for new work. HMRC report that only 1.7% of R&D tax relief claims come from the construction industry.
Other sectors such as manufacturing, business services, food service and hospitality have filed a substantially higher number of claims, despite the construction sector contributing two million jobs and around 7% to the nation’s total output. The government has increased efforts to incentivise companies who are investing in research and development, but so far innovators in the construction sector have remained largely unaware of the financial help they could receive.
Sue Nelson, Director of RIFT Research and Development says, “There have been some breathtaking engineering advances in the construction sector in the past decade. Innovations in scaffolding structures, new ways to construct sustainable and affordable homes, enhancements to road and rail infrastructure and continued improvements to health and safety, demonstrate the continued progress of the construction industry.”
Research and development tax relief is a subsidy paid to companies undergoing product development or working on new methods, processes, materials or software to make them more competitive. R&D tax relief is available to any Limited company carrying out new developments in its sector. To qualify for the SME scheme, the company must employ fewer than 500 employees and have a turnover of less than 100 million euros. The salary of employees working on qualifying activity can be reclaimed, as can prototypes, materials and certain payments to sub-contractors.
On average, a company can expect around 25% of this expenditure back. This can be claimed as a corporation tax refund or as a straight payment if the company is in a loss-making situation.
For a first claim, companies can look at qualifying costs going back the previous two years as well as the current financial year, which means the first claim is often quite substantial. Rift Research and Development recommends that construction companies currently undertaking product or engineering development for client projects, should contact a tax specialist to receive the full benefit from the R&D tax relief scheme.
It’s no secret that we’re heading into a critical time for the whole UK construction industry. It’s going to take an estimated 158,000 new jobs to hit the targets for infrastructure and housing needs...