Tax Relief for Construction

Innovation Funding for Construction Businesses

Dating back to ancient civilizations when shelters—along with the tools to make them—were built using only natural materials such as sticks, animal skins, and mud, construction has always existed in one way, shape, or form.  

Advancements within the industry led to mammoth structures including the Mesopotamian palaces, temples, and ziggurats, spanning from the tenth millennium BC to the sixth century BC; the magnificent architecture in ancient Egypt, Greece, Rome, and China; and neolithic construction from 9000 BC to 5000 BC. 

The words “construction innovation” likely conjure up thoughts of large revolutionary feats in the industry; however, research and development (R&D) in the construction industry could relate to the adaptation of construction techniques to overcome problems on site or the use of innovative new materials in a project. 

R&D in Construction

The UK construction industry has always been synonymous with innovation and progress. From towering skyscrapers to intricate infrastructure projects, the sector constantly pushes the boundaries of engineering and design. But what drives these remarkable feats of human ingenuity? The answer lies in R&D, a vital force propelling the construction industry into a new era of efficiency, sustainability, and technological advancement. 

A key contributor to the growth of the economy, construction firms must maintain a competitive edge through innovation and investment in R&D.

Here are some examples of R&D in construction:

  • Adapting processes or equipment to meet industry regulations

  • Creating new materials for use in construction projects

  • Creating new or improved technology for existing buildings

  • Designing and developing new mechanical and electrical systems into buildings

  • Developing new or improved equipment for use in construction

  • Developing sustainable methods and processes, for example, sustainable technology innovation in construction

  • Modifying existing components and fittings into projects

    How Can You Fund R&D in Construction?

    There are various forms of innovation funding available to enable construction R&D to take place, including grant funding and tax relief.    

    Grants, usually nonrepayable, are awarded by funding bodies prior to any innovation taking place, whilst tax relief is a retrospective incentive, claimable after the accounting period in which the R&D took place.    

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    Grant Funding

    Any business that’s investing time and resources into innovative R&D in the UK can apply for and access UK/EU grant funding. There are various funding bodies, such as Innovate UK and the European Innovation Council, which provide funding competitions for businesses to access funding to innovate and grow.
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    The Patent Box

    The Patent Box is a government tax relief scheme that rewards companies for investing in innovation. If a company is making a profit on patented inventions, it’s eligible for a lower effective corporation tax rate of 10% on relevant profits. What’s more, if a company is eligible for the Patent Box tax relief regime, it’s likely that it’s also eligible for R&D tax relief.
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    R&D Tax Relief

    HM Revenue and Customs’ (HMRC’s) R&D tax relief scheme rewards businesses that are seeking an advance within their industry. R&D tax credits can be claimed by businesses that are developing new systems, products, or processes or modifying existing ones, which in turn create a scientific or technological advancement.

    Ryan’s Sector Specialist:

    Andrew McKeown – Senior Consultant, Research and Development

    Andrew has gained a great deal of success consulting R&D tax credit submissions for construction clients covering sectors such as groundwork, house developers, steel and light gauge steel framing (LGSF) portal buildings, curtain wall design, mechanical, electrical, and plumbing (MEP) installation, and smaller groups such as telecommunications infrastructure, architects, roofing, surfacing, concrete plants, scaffolders, and off-site volumetric development. He has a client portfolio within the industry of approximately 100 companies, returning more than £20 million in client benefit.  

    Before joining Ryan, Andrew worked as a project compliance inspector for an HMRC-approved regulator (Entrust), ensuring building projects for community groups and charities delivered compliance and value for money to the deferred tax scheme. 

    Andrew is an IRCA-registered ISO 9001 Quality Management System (QMS) auditor with experience across various audit sites including construction, engineering, manufacturing, supply chain, and logistics. 

    Your Innovation Funding Partner

    R&D’s influence is evident in every facet of construction, from ground-breaking designs to sustainable practices. The future of construction is being built today, and it’s a future that promises a safer, more sustainable, and more interconnected world. 

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