R&D Tax Case Studies

Construction

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Construction

Research and Development (R&D) tax relief is often not thought of by construction companies. However, many of the activities undertaken in both the design and on-site work could qualify as R&D and lead to cash savings.

Working in construction often requires you to be creative and innovative when faced with certain problems, to arrive at a solution that is both effective and cost efficient. All too often businesses undertaking such work do not consider that they may be eligible for R&D tax relief. Consequently the significant benefits go unclaimed.

How can R&D Tax help your business?

For small and medium sized businesses (SMEs) this takes the form of an additional tax deduction calculated as 130% of qualifying costs and provides an effective cash tax benefit of 25% for profitable companies. For loss making companies, a cash credit of up to 33.35% is available.

For larger companies (over 500 employees and either €100m turnover or €86m gross balance sheet) the benefit is reduced, but is recognised above the line, i.e. as an increase to operating profit. The effective cash tax benefit is 9.72% of the spend. For loss making companies, the 9.72% is available as a cash credit.

Capital spend on R&D should also not be overlooked as there is an immediate deduction available for capital R&D expenditure.

This gives a significant cash-flow benefit when compared to other allowances where, at best, the relief is given over more than 10 years, and in many cases, not at all.

Qualifying Costs in Construction

You can claim relief on costs that have been expensed through the Profit & Loss account and in certain circumstances you can also claim expenditure capitalised as intangible assets). The main areas of costs that can be claimed are:

  • Staff costs (gross pay, employer’s NI, employer’s pension contributions and certain reimbursed expenses) of employees directly and actively involved in the R&D and also where undertaking certain supporting activities.
  • Agency workers.
  • Subcontractors.
  • Software license costs.
  • Consumable items (including a proportion of heat, light and power).
We have saved our clients in Construction over £1,000,000 by evaluating and managing their R&D Tax Credit Claims
We have saved our clients over £3,000,000 by evaluating and managing their R&D Tax Credit Claims
Construction Industry Examples

R&D in construction generally features whenever there is creativity required or problems to be solved, and is found in both the design phase and in work on site. Examples of activities that could qualify include:

  • Working with listed buildings to deliver the improvements required but keeping traditional features.
  • Creating or experimenting with new materials.
  • Coming up with new ways to implement energy saving techniques.
  • Integrating new technology into buildings.
  • Using science or technology to improve user experience in modern buildings.
  • Modifying existing components and fittings into bespoke projects.
  • Development or adaptation of tools and materials to improve efficiency.
  • Identification of technological improvements to performance of products and processes.
  • Prototype design and commissioning, including quality testing and final building.
  • Innovative use of green or sustainable technology and methods.
  • Advancements in structural techniques to aid construction on unusual ground conditions.
  • Fabrication of components, integration and assembly of large systems that is technically challenging and not straightforward.
  • Working out how all services can fit into an area that may not have the usual space (this problem can also appear on site if a specific issue prevents standard procedures being used).
  • Introduction of environmentally friendly processes, such as significant reduction of waste.
  • Design and build of specialist machinery, or modification of existing equipment.
  • Adaptation of existing construction methods or designs to overcome site challenges, such as restricted access.
  • A seemingly straightforward project could be hiding a host of challenges forcing plans to change and on-the job improvisations (e.g. erosion of materials due to gas or water vapour ventilation, or air conditioning units not operating effectively due to bespoke casings).
Construction Industry Case Studies

R&D in construction generally features whenever there is creativity required or problems to be solved, and is found in both the design phase and in work on site. Examples of activities that could qualify include:

Our Reviews

Working with RSL was a lot easier than I thought it would be. When we first spoke to them we were apprehensive that there would be a lot of work on our part, but the RSL team took all the pressure off and got us a refund of £42,000 which has massively helped our cashflow and helped us to tender for bigger contracts. We would definitely recommend them to anyone else.

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Mr M Brailey
Mr M Brailey
BLL Associates Ltd

The whole process with RSL was incredibly straightforward and Rob and the team were able to guide me through the whole process at ease.

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Mr J Thripp
Mr J Thripp
Total Complete Control UK Ltd
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To find out if your project or innovation qualifies under the R&D SME scheme and how it can help your business, get in touch for a Free, No Obligation Evaluation. Start claiming R&D Tax Credits today.

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Reviews

Bob Jones

RSL are one of the most efficient companies we have had the pleasure of dealing with. They take the hard work away and make it easier to understand whats going on. i wish i had come across this company years ago

Fertilizer Industrial Services Ltd

Good team and knowledgeable. With a combination of engineering and tax expertise the RSL team help us to save on tax by correctly assessing our R&D effort. We are looking forward to work with them in the future as we develop a trusted relationship. Highly recommended.

Root3 Lighting Ltd

We received a great Service from RSL, they guided us through the entire process & made what could have been a complex procedure very simple & straight forward. I would highly recomend any business owner/FD to get in touch with them!

Total Complete Control UK Ltd

The whole process with RSL was incredibly straightforward and Rob and the team were able to guide me through the whole process at ease.

Michael Egan Associates Ltd

RSL were able to maximise our R&D claim which has helped our business massively. The first company we spoke to about R & D didn’t inspire us with much confidence but the RSL team were excellent and their process was straightforward and open. We have no hesitation in using their service and would recommend anyone else to do so.

BLL Associates Ltd

Working with RSL was a lot easier than I thought it would be. When we first spoke to them we were apprehensive that there would be a lot of work on our part, but the RSL team took all the pressure off and got us a refund of £42,000 which has massively helped our cashflow and helped us to tender for bigger contracts. We would definitely recommend them to anyone else.

Case Studies

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Research and Development (R&D) tax relief is often not thought of by construction companies. However, many of the activities undertaken in both the design and on-site work could qualify as R&D and lead to cash savings.

Working in construction often requires you to be creative and innovative when faced with certain problems, to arrive at a solution that is both effective and cost efficient. All too often businesses undertaking such work do not consider that they may be eligible for R&D tax relief. Consequently the significant benefits go unclaimed.

Construction Case Studies
Benefits of R&D Tax in Construction

For small and medium sized businesses (SMEs) this takes the form of an additional tax deduction calculated as 130% of qualifying costs and provides an effective cash tax benefit of 25% for profitable companies. For loss making companies, a cash credit of up to 33.35% is available.

For larger companies (over 500 employees and either €100m turnover or €86m gross balance sheet) the benefit is reduced, but is recognised above the line, i.e. as an increase to operating profit. The effective cash tax benefit is 9.72% of the spend. For loss making companies, the 9.72% is available as a cash credit.

Capital spend on R&D should also not be overlooked as there is an immediate deduction available for capital R&D expenditure.

This gives a significant cash-flow benefit when compared to other allowances where, at best, the relief is given over more than 10 years, and in many cases, not at all.

Qualifying Costs in Construction