R&D Tax Credits in Construction
Running a building project is never easy. In fact on many projects – builders, site managers, foreman, construction directors and draughtsman are involved in solving problems for their clients. And solving problems for their clients could mean that their company qualifies for R&D tax credits for construction. The proof is often in the pudding – 8% of R&D claims last year were in the construction industry – with an average claim of about £54,000.
There are currently thousands of construction companies across the country working on projects using cutting-edge techniques or developing advances to existing techniques. Although the majority of these could be financially benefiting from valuable R&D Tax Relief, many are unaware that the projects they are undertaking qualify for this support.
What qualifies as R&D in Construction
To qualify for R&D tax relief – you need to be operating from a limited company. You also need to have performed work that has led to a technical advance in your field. I’ll save you from the technical jargon and give you some examples of work that could qualify:
- Designing a new way of building on or near listed buildings to maintain its structural integrity
- Using and testing a new material as aggregate which you've determined to be effective and structurally sound for use in construction projects
- Making technical designing amendments to a building or plan to adapt it for challenging circumstances. Such as water logged land or poor soil conditions
- Using a material in a new way as part of a build project
- Using a part or tool in a new way
- Adapting a piece of machinery to make it more effective, so it has new functionality, or meets new regulatory requirements
And those are just some examples. We regularly work with construction companies, helping them claim for all kinds of projects.
Case Study – Celtic Construction Company
This client didn’t think their work would qualify for R&D tax relief, and didn’t want to waste any time trying to make a speculative claim. However, after a short meeting with one of our expert R&D tax consultants, we pin-pointed 2 projects that qualified for tax relief.
The first was the development of a bespoke soakaway drainage system, to allow water to soakaway and be held under the strip foundations of a building on a waterlogged site with limited space for a full soakaway.
The second project required adjustments and improvements to a buildings structure to allow it to be erected on shaley ground with a significant slope. Both of these projects were successful and took place over the last 3 years – and thanks to their consultation with Zest – the Celtic Construction Company were able to quickly access £40,000 of tax repayments and reductions.
Could Your Construction Business Qualify for R&D Tax Credits?
Find out if your business could qualify for R&D tax relief, with a 15 minute, no obligation consultation. We’ll talk about what work you’ve done and how much you could claim. Then you can decide how you want to proceed.
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The Chancellor will deliver the Autumn Budget 2026 on Wednesday 28 October. For any UK company running an R&D tax relief claim — or planning its first — it is worth knowing what is genuinely on the table before the red box opens, and what is simply noise. The short version: after three years of near-constant reform, the R&D regime is finally settling. Most of what matters for your next claim is already law. But a Budget always carries the risk of a technical tweak, and there are a few signals worth tracking. Where the R&D rules stand going into the Budget The big structural change is done. The merged RDEC scheme is now the default for accounting periods beginning on or after 1 April 2024, replacing the old separate SME and RDEC regimes. It gives a taxable expenditure credit of 20% of qualifying R&D costs — worth roughly 15% net once Corporation Tax at 25% is applied. Loss-making, R&D-intensive SMEs are the exception. If your qualifying R&D is at least 30% of total expenditure, you may instead claim under Enhanced R&D Intensive Support (ERIS), which offers a more generous deduction and a payable credit for surrenderable losses. None of […]
