Published 27/04/2020
Modified 06/02/2023
4 min read

R&D Tax Credits for the Construction Sector

Innovation Tax give examples of the many types of activity in the construction industry that often lead to significant amounts of funding being claimed via R&D Tax Credits.

R&D Tax Credits for the Construction Sector

More companies in the Construction industry could benefit from significant funding from R&D Tax Credits

With over 325,000 registered firms operating within the sector, the construction industry generates around £120bn, or 6% of GDP to the UK economy according to the House of commons Briefing Paper – Dec 2019, and many of these companies regularly engage in R&D to resolve complex challenges in their day-to-day operations.

The industry itself plays a big part in driving the economy forward, and we would urge more companies in the sector to review their entitlement to claim this valuable tax incentive. This can lead to new, more efficient and sustainable building materials, construction methods, and technologies whilst also helping to improve the quality and safety of buildings and support the growth of the industry.

R&D Tax Credits can be particularly beneficial for SME’s in the construction sector, as they can help these companies to finance their R&D activities and compete with larger companies whilst improving competitiveness; leading to increased economic growth, job creation, and cash flow.

What types of Construction Industry activities qualify for R&D tax credits?

Examples of the types of activity which are likely to qualify for R&D Tax Credits within the Construction sector include;

  • Creating, trialling and experimenting with new/different materials
  • Developing and implementing building management systems for maintenance and energy control
  • Optimising designs and processes to reduce time and raw material usage
  • Integrating environmental and renewable energy systems
  • Developing new components and safety equipment
  • Improving or adapting existing methods to seek appreciable improvements on efficiency, durability and sustainability
  • Creating new engineering techniques to develop new products, materials and processes
  • Overcoming technical challenges associated with regulatory and compliance requirements
  • Implementing new energy saving technologies within buildings
  • Solving complex challenges with unique site conditions and unusual build requirements
  • New/improved construction methods such as off-site prefabrication, modular construction, or 3D printing
  • Improved energy efficiency such as new insulation materials, more efficient heating and cooling systems, or other industry advanced ways to reduce energy consumption in buildings

The average annual R&D Tax Credit claim benefit received by companies in the Construction industry is currently £67,000

What types of expenditure can be included in a R&D Tax Credit claim?

R&D Tax Relief can be predominately claimed on revenue expenditure in the following cost categories:

  • Staffing Costs
  • Subcontractors
  • Externally Provided Workers (EPW’s)
  • Consumables
  • Software licenses
  • Utilities (HLP)

Why work with Innovation Tax?

As R&D Tax Credit claim specialists, with a highly skilled team that includes technical experts who have worked in the Construction industry for many years, Innovation Tax is ideally placed to support companies in this sector in efficiently & accurately identifying the full extent of their scheme qualifying activities and eligible costs and submit a robust claim that will stand up to HMRC scrutiny; whilst also ensuring that they are fully benefiting from other Government incentives such as the Patent Box, and maximising their Capital Allowances tax relief on commercial property assets.


It can be challenging to submit an R&D Tax Credit claim to HMRC’s exacting standards.
At Innovation Tax, our team of experienced sector specialists, technical and quality assurance experts and tax professionals will help you identify the full extent of your qualifying activities and expenditure and work with you to ensure the correct information is included in the claim documentation, giving you peace of mind that your claim is robust, maximised and defendable.

Start the conversation with a complimentary, no-obligation discussion.

Innovation Tax specialise in helping companies access vital innovation tax incentives and grant funding to enable their businesses to grow, increase profitability, reduce risk and enable further investment in R&D, IP and capital assets.

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