Construction companies in the UK continue to miss out on tens of thousands of pounds of Research and Development (R&D) Tax Credits, according to the latest figures released by HMRC.
The research shows that despite R&D Tax Credits aiming to drive innovation, construction firms’ R&D claims continue to fall behind other sectors with companies claiming a total amount of £45m in 2016.
The analysis indicates a positive trend for construction firms with an increase of 29 per cent in the total value of Tax Credits claimed since 2015, compared to the average for all sectors of 25 per cent.
However, it is still significantly below other sectors such as Manufacturing which secured £860m in R&D tax claims and Professional, Scientific & Technical which claimed back £635m. Furthermore, the average received per R&D tax claim by construction companies was only £64,000.
Overall, construction accounted for just 2.7 per cent of total claims and 1.7 per cent of the total tax benefits claimed.
This research provides evidence that many construction companies continue to miss out on this valuable tax relief initiative, and according to one of the UK’s leading R&D Tax Credit specialist the Momentum Group, this is due to a number of reasons. These include a lack of awareness and 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. The company is successfully working with leading accountants, banks and financial institutions and many others across the UK to raise the profile of this generous tax relief.
The R&D specialists are calling on all construction businesses and their accountants to take action this year to explore this valuable incentive.
For more information on Momentum visit www.momentumgroupni.com