Business Support for Problem-Solvers in the Construction Sector with Randee

David Fribbins, Director of?Randee, explains what R&D Tax Credits are. (Excerpts from an article originally published in September 2021).

“We work very specifically in the niche markets of becoming tax-efficient and making sure that you're accessing grants. We're tax consultants and accountants, but we don't do accounting. We're effectively translators in that field. There are multiple types of tax credit. We deal with all of them, but my background being construction, that's my specialism.

“Construction is the third largest industry in the UK from a GDP standpoint, it generates ￡120 billion in revenue each year, but the whole sector has only taken around a 5% share of the R&D tax credits claimed. That includes architects, engineers, and contractors. In 2018/19 (the last full data set) only 1% of all the construction companies registered at Companies House claimed R&D Tax Credits. Both of those statistics tell the same story, that construction companies are underrepresented in the data!

"only 1% of all the construction companies registered at Companies House claimed R&D Tax Credits"

“The average claim in construction is ￡70k. So, if you’re the director of a construction company of any size or discipline, it’s worth taking an hour to get some advice on what it means for the sector and your business. It’s an absolute no-brainer.

“In a nutshell, Research and Development (R&D) Tax Credits are the same as grants – except rather than getting money upfront, you get a tax credit at the end of the project, or at the end of the financial year. The government is trying to incentivize companies to solve problems and take risks and try new things. If you can't get a grant to do that, tax credits could help. Like I-Construct it's also about innovation, trying to bring something new to the field.

"Like I-Construct it's also about innovation, trying to bring something new to the field."

“There's also land remediation relief, which is quite a big deal in construction. It’s a type of tax credit that’s clearer cut than R&D Tax Credits. It looks at whether you have cleaned up contaminated land and if you qualify based on the contracts you have in place. Companies are cleaning up asbestos, below-ground concrete, Japanese knotweed, radon, and any contaminants that can be harmful to humans, but they don’t necessarily know that they claim back tax for doing so.

“The other big one is Patent Box Tax Relief. Companies that have patents only need to pay 10% corporation tax on the profits from sales relating to the patented invention. These are highly complicated and need some very specialist guidance to access, but companies can reap the rewards for 20 years.”

“One of the main reasons so few construction companies have claimed tax credits is the language that's used within the tax arena. The terminology is not the language that's used on a building site. No one on a building site has ever described what they do as ‘innovative’.

"No one on a building site has ever described what they do as 'innovative'"

“Because of my construction background, I've got the technical knowledge of the industry, and I've got the language. We act as translators. It's about trying to frame things how a contractor would describe their work, or how an architect would describe what they do. Rather than ‘innovators’, we look for ‘problem-solvers'. Rather than searching for people ‘doing R&D’, we look for people who are ‘making things work’.”

For more information on R&D Tax Credits, land remediation relief, or Patent Box Tax Relief, contact Randee. Would you like support to develop or launch new products and services? Take a look at the I-Construct grant programme.