The Construction Expo held at the Kent Event Centre is one of the foremost events of the construction calendar and has a consistently strong attendance, with a whole host of companies exhibiting, and fascinating talks and workshops from industry thought leaders. Head of RIFT R&D Tax Credits, Sarah Collins, and business development lead, Liam Dowe, were delighted to attend this year. Thanks to everyone who stopped by their plinth for a chat and to relieve them of their popcorn (saving them from themselves!).
It’s an understatement to say that the last few years have been a tough ride for UK construction. In August of this year, the sector slumped into a recession for the first time in four years, but if the overall feel at Kent Event Centre this year can be taken as an indication, then UK construction is hungry for success, and, just as importantly, change.
While attending the event RIFT saw a number of exciting advances in the sector, from SOSEC’s solar powered barrier to astounding advances in modular building, along with a showcase of ambitious infrastructure and regeneration projects underway across Kent and Medway.
The global construction market is forecast to grow by a goliath 70% by 2025. Given the hard work, innovation and expertise on display in the UK’s construction sector, there seems to be no good reason why the UK can't account for a generous portion of that growth. The UK has the potential, know-how and work ethic required to shine in the construction global market. That said, there are several factors that have been holding UK construction back, which government and industry experts are working together to tackle.
In July 2013 the UK’s long term plan for success was outlined in the Construction 2025 joint strategy, in which construction is highlighted as a linchpin of the UK economic infrastructure. While there can be no doubt that UK construction companies are working hard, a key strategic priority is getting them to work smarter. It is hoped this can be achieved through encouraging the sector to be more technologically advanced, carbon neutral and generally more efficient. Industry experts are also calling for collaboration with others in the industry and academic institutions to stoke innovation.
There are four main improvement commitments identified within the 2025 strategy:
• 33% lowering of the cost of construction.
• 50% improvement in delivery time from inception to completion.
• 50% reduction in greenhouse gas emissions.
• 50% reduction in the trade gap between imports and exports.
These will be carefully monitored in the coming years. The correlation between these targets and increasing R&D in the industry seems clear; innovation will play an essential role in achieving these by 2025.
However, a failure to invest in Research and Development is identified as a weakness in the industry. From figures gathered in 2011, only a third of the industry was said to be innovating in any way. According to the latest Research and Development Tax Credit statistics, only 2% of the UK R&D Tax Credit Claims came from the construction sector.
RIFT R&D Tax Credits have always maintained that many UK Construction companies are innovating but don’t recognise it themselves; it’s common for these companies to take the kind of problem solving seen in successful R&D claims in their stride. The prevailing attitude in the sector seems to be that ‘innovation’ is synonymous with ‘business as usual’.
Another reason for this apparent lack in R&D investment, and one stated in the strategy, is that businesses in the sector are simply not aware of the financial assistance available to encourage and reward innovation.
The R&D Tax Credit scheme is a valuable way for construction companies which are tackling these issues through the creation of new products or processes, or significant improvements to existing ones, to get a chunk of these costs back. A successful claim can result in cash, a reduction or refund of corporation tax, or tax relief that can be strategically moved forward to mitigate future tax bills.
The sort of activity that might qualify is varied and quite broad, but, for example, a construction company that has to significantly adapt their construction methods or tools due to unusual on-site conditions will likely be breaking new ground and solving technical issues, and therefore will likely qualify. And it’s not only the innovation which happens on site and in the work shop that should be considered: many construction companies are creating their own bespoke software to handle specific sector level requirements which simply aren’t catered for in off the shelf systems.
RIFT Group has been providing tax expertise to construction industry for over 16 years and their R&D team are experts at unpicking these threads of qualifying activity from day to day business and identifying the claimable costs associated with them. Given that the average claim for construction is £40,000.00 it’s well worth the short time it takes for a company to find out if they qualify.
Get credit for your business innovation with research and development tax credits claim assistance from RIFT. Find out more about R&D tax credits for the construction industry, deep dive into the world of business innovation with our insights, or contact RIFT R&D today to find out how we can maximise your benefits.