R&D Tax Credits
DURING THE LATE 1970s and early 1980s, Bill Werbeniuk was one of professional snooker’s most renowned figures. Nicknamed ‘Big Bill’ – he was the first man to split his trousers during a televised match – and consuming between 40 to 50 pints a day, he was prominent character of the game.
Suffering from a hereditary nervous disease, Bill’s habit of ‘downing at least six pints before a match and then one pint for each frame’ was medically certified; in turn, the envy of every armchair viewer when it was explained that he could offset the cost of beer against his income tax.
The qualification for tax relief is rarely so colourful as Bill’s tale. However the potential opportunity missed within UK construction sector is a far more important story.
A key aim of the Construction Sector Deal was to increase spending on Research and Development (R&D) in the sector to stimulate innovation. The House of Lords Select Committee review into offsite construction advocated that:
HMRC should work with the [offsite] sector to foster greater understanding of how R&D tax credits work, what the benefits are and how to meet the criteria to receive them.
The same review identified that wider use of R&D tax credits could help increase spending on R&D. Government statistics show that the construction industry has been slow to recognise its participation in conducting R&D. With perception of R&D often governed by stereotypes, construction firms can be blind to how development of bespoke solutions, realising technological advances and resolving uncertainty could constitute qualifying expenditure. It is all too easy to be blind to the accomplishments of our industry and how the professionals within it address complex challenges that demand innovative and unique solutions.
However this position has begun to shift:-