Introduced by the Government in 2000, the R&D tax relief scheme is designed to encourage innovation and global competitiveness by allowing companies to reclaim some of the money invested in qualifying research and development. R&D tax credits are generally considered to be one of the most attractive tax reliefs available, often resulting in significant cash repayments from HMRC.
What are the benefit?
The benefits include increased cashflow, which is especially important to innovative, developing companies. it also encourage development of a corporate philosophy that embraced innovation and improvement.
Do you qualify?
A common misconception is that the scheme is just for companies with R&D departments and men in white coats. The fact is that any company that spends money trying to improve a product or service through a technological advance, using qualified staff and appropriate project controls, and where there's doubt about the project's success, is likely to be eligible.
R&D in Construction and Materials
A huge variety of engineering and materials companies are involved in, and offer support to, the construction industry in the UK. These span from the manufacturers of concrete, damp proof coursing, tanking, steelwork, render systems, insulation systems, cladding panels - using sheet materials to clay tiles, glulam beams, ETFE (clear plastic roofing system), glazing, fixings, glues and paints and more.
All of these products have to meet specific technical performance requirements, and also comply with constantly changing legislation. Other areas of possible eligibility are in the construction and trialing of prototype homes that are more energy efficient and produce less CO2, especially to meet ever-stricter regulations.
What are the potential areas of eligibility?
A vast range of activity, which could include:
- Increasing the durability/lifespan of materials that protect the exterior of a building;
- Increasing the stability of products (e.g. to reduce sun bleaching);
- Improving the energy efficiency of systems used within a building;
- Developing alternative production or construction techniques to reduce the environmental impact of construction projects;
- Land remediation - developing more effective techniques at removing contaminants from land, or finding ways to remove new combinations of waste chemicals.
- Developing construction techniques to create buildings that are more resistant to earthquakes, storms, and other acts of nature.
What problems might a company face?
- Can't develop land because of the presence of an unusual combination of chemical pollution or because of abnormalities in the geology of the area;
- Trying to inhibit moulds in areas which have high humidity and cross-ventilation is not practical;
- Sick Building Syndrome (in which a combination of flaws in heating, ventilation and air conditioning systems result in poor indoor air quality and respiratory irritations for its occupants).
If you can answer 'Yes' to most of these questions then, based on your experience across thousands of clients, it looks like you could have a successful claim:
- Have you developed new tools, products or services using technology?
- Have you tried to improve your existing products through technical changes?
- Have you had to resolve technical problems with any of your products?
- Have you found more efficient ways to produce your products or services?
- Have you experimented with new equipment or production techniques?
- At the start of a project, did you ever think 'I'm not sure of the best way to do this'?
- Have any of your projects failed for technical reasons?
ABGI is a leading international tax incentive and innovation management advisor. We help companies accelerate their innovation activity by identifying and securing appropriate funding in the form of grants, tax incentives or commercial funding.
With 30+ years heritage and 200 experts, we manage +£870million of innovation incentives annually across 19 countries, for some of the world's best known brands.