By Catriona Lingwood, Chief Executive of Constructing Excellence in the North East
Civil engineering and construction companies could be missing out on valuable tax relief due to their lack of knowledge around capital expenditure and HM Revenue and Customs (HMRC) legislation. It’s time employers start educating themselves and start claiming back what’s rightfully theirs.
Since the government launched its Research and Development (R&D) tax credit scheme back in 2000, around £16.5bn has been claimed in total. In 2015-16 £2.9bn was paid out, with only £45million of that going to construction. That’s not to say the money isn’t owed to us, it’s just that we’re the industry making the least claims. In the same year, there were a total of 26,255 claims, with only 705 coming from our industry.
Research suggests that the lack of construction claims can be blamed on the confusion of the definition and perception of R&D among industry workers. Most people think of R&D and think of scientists in labs and white coats, but that’s not the case at all. HMRC defines R&D as ‘a project that creates new processes, products or services, or makes improvements to existing ones and overcomes technological or systems uncertainty’, I don’t know about you but I’d say that pretty much covers a lot of what we do on a daily basis; we’re always looking for easier, safer and more environmentally friendly ways of working.
Contractors working under the Construction Industry Scheme (CIS) can also claim capital allowances on plant and machinery, tools and business vehicles such as lorries or vans, as such large purchases can have a significant impact on a contractor’s finances. Many contractors are unaware of the full range of items that can be considered under capital allowances; lifts or air-conditioning units, CCTV systems, kitchens and bathrooms all fall into this category. There seems to be a theme here; the issue definitely lies with lack of education and not knowing what can and can’t be claimed back.
Constructing Excellence in the North East, along with T4C, are holding a breakfast seminar looking at ways of claiming back work costs and getting access to your share of the billions of unclaimed tax relief. The presentation will show how day to day jobs qualify for cashback and how the industry, although it might be one of the lowest claiming sectors, could potentially have the highest returns. Don’t assume your projects won’t qualify…a ground construction company received £30,643 and a building contractor has received £34,042 in cashback!
The industry is constantly been told to be more innovative and we’re trying our best with the limited money that we have and I’m very impressed with the work we’ve been doing but imagine what we could do with all that extra money, we can invest in offsite construction, robots and IT programmes. The ideas are there, and so is there money if we go out and get it. It’s a simple case of if you don’t ask, you won’t get. What have you got to lose?
For more information or to register your place at the event, please contact Leanne at firstname.lastname@example.org or call 0191 500 7880.