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Has Covid created opportunities for R&D tax rebates for the construction sector?

The Government’s R&D tax credit scheme was introduced in 2000 and is designed to promote innovation by rewarding companies that develop new products, processes and systems, or appreciably improve existing ones.

Many construction businesses have been forced to innovate to mitigate risks and maximise opportunities arising from the impacts of COVID-19.

As a result, construction businesses could be eligible for significant R&D tax relief rebates as a result of having to rework sites to keep them operational during the pandemic. Where firms have redesigned sites or introduced new and improved safety measures/processes to ensure work can continue in a safe manner, they could be eligible to recoup expenditure through an R&D tax credit claim.

Where does R&D lie in the construction industry?

Even without the challenges COVID-19 has presented, construction projects encounter a host of complications that are often considered routine or “nothing new”.

The resolution of these challenges typically requires non-standard technical approaches to successfully reach completion. The R&D scheme is in place to reward the efforts dedicated to overcoming these constraints, by reducing your corporation tax liability.

What is qualifying expenditure for R&D?

Deciding what is qualifying R&D activity is often subjective and can require specialist interpretation to identify a project. A construction project can generate a full spectrum of advancements from developing new methodologies, adapting atypical technologies or improving existing processes.

It’s a common misconception but R&D does not have to involve a lab and a white coat. It could be a new engineering solution to solve a problem, or lie in the design of innovative methods to improve health and safety, or the development of tools/ technologies which improve efficiency or reduce environmental impact.

Reaction to COVID-19

There was an enormous response from the construction industry to keep sites and the economy operating since the pandemic hit. Much of that work to overcome the challenges COVID-19 presented could lead to valid R&D claims.

A significant number of construction business could be eligible to make a claim associated with overcoming the impact of COVID-19 on their operations but due to a lack of awareness, the sector could miss out on potential R&D tax rebates.

Whether you’re overcoming technical challenges by creating new processes or developing better, safer working environments you could be carrying out R&D.

Get in touch

If you are interested in finding out whether you qualify for an R&D tax relief claim, speak to our dedicated team to ensure you are maximising your ability to claim: james.greenhalgh@cowgills.co.uk 


The information was correct at time of publishing but may now be out of date.

Posted by James Greenhalgh
16th February, 2021
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