Construction missing out on R&D tax credits

Figures released by HMRC show that construction companies in the UK are missing out of tens of thousands of pounds available for Research and Development.

HMRC has published its latest data on R&D tax credits, which are designed to support innovation, that shows construction is falling behind other sectors in claiming this government support.

Analysis shows that some £45M was claimed in 2016 by construction companies, an increase of 29% on 2015, but this is still far behind other sectors, such as Manufacturing which secured £860M in R&D tax claims and Professional, Scientific & Technical which claimed back £635M.

Construction claims accounted for 2.7% of claims, with the average company receiving £64,000 per R&D tax claim.

The figures show that construction is missing out on this valuable tax relief and driver to innovation. According to one of the UK’s leading R&D Tax Credit specialist the Momentum Group, this is due to a number of reasons, from a lack of awareness, to not understanding which activities and costs qualify for this purpose.

Momentum Group Managing Director, Tom Verner, commented: “One of the biggest issues with construction companies claiming their full R&D tax relief, is that many believe R&D Tax Credits are only available for traditional research sectors and ‘white coat’ industries.

“Interestingly, the statistics show that SME’s are driving the growth in claims, accounting for 77% of construction companies’ total R&D Tax Credit claims. This is positive for SMEs in operating in the construction sector which need all the help they can get. As a UK company specialising solely in R&D Tax Credits, Momentum partners with construction companies of all sizes to ensure they claim what they are legitimately entitled to.” he continued.

Tom added: “These claims are so important in encouraging companies to innovate and by not taking advantage of this available tax relief, construction firms risk stagnating their growth and restricting their competitiveness which effectively holds back our overall economy. Relief can be in the form of cash, or a reduction in corporation tax liability.”

Momentum has been working hard to raise awareness of R&D Tax Credits amongst companies in construction. It is calling on all construction businesses and accountants to explore this valuable incentive.

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