‘Build, Build, Build’ Goes Hand In Hand With Innovation
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Prime Minister Boris Johnson has pledged to pull the UK out of its economic woes by appealing to the construction industry. His ‘build, build, build’ programme is certainly ambitious, designed to boost jobs growth, prosperity and innovation in the wake of COVID-19.
The plans in a nutshell
£5 billion of capital investment projects are being proposed to prop up the economy and get the country back on its feet. These include:
- £900 million for a broad mix of ‘shovel ready’ local growth projects in England to be completed during the rest of 2020 and into 2021. There is also set to be £96 million available for accelerating investment in high streets and town centres via the Towns Fund.
- £560 million and £200 million for upgrades and repairs to schools and Further Education colleges respectively
- More than £1 billion to fund an initial batch of 50 projects designed to refurbish and rebuild schools over the next 10 years
- £100 million to be spent on 29 different projects across the road network plus £10 million for developing a solution to the Manchester rail bottleneck
- £1.5 billion set aside for hospital maintenance, improving A&E capacity, building new hospitals and eradicating mental health dormitories
- £142 million for maintenance of around 100 courts, to include digital upgrades. £83 million is also being ring fenced for the improvement of prisons and young offender facilities, as well as £60 million allocated to temporary prison places.
To support this ‘build build build’ ambition, the government will also publish a National Infrastructure Strategy in the autumn. The purpose will be to highlight core economic infrastructure plans, including those around road and rail, waste, energy networks and flood defences.
This is only a brief overview of the Government’s plans. More detail can be found on the recent press release.
How does this relate to innovation?
Innovation is about developing brand new products, processes and services, or about taking a concept that already exists and improving on it. It centres on the generation of new ideas and making changes that solve a company’s needs and boost its competitiveness.
Construction is a vital cog in the wheel when it comes to economic recovery post-coronavirus. However no two projects are the same, meaning that construction companies have to adapt their resources and processes to get each one completed.
Innovation in construction is therefore ongoing and ever changing, depending on the nature of the work and the challenges that arise. This makes it a prime candidate for R&D tax relief, which we’ll look at in more detail below.
Where is innovation coming from in housing?
When it comes to house building specifically, the innovation opportunities are virtually endless. For example, offsite manufacturing and 3D printing are two ways in which a construction can make efficiency and environmental gains, not to mention low-carbon houses to help in the battle against climate change. Connected home solutions are also enabling people to manage their homes in a smarter way, and there are more and more assisted living innovations that can transform the lives of elderly and vulnerable groups. Plus of course there’s a huge range of additional innovations being made in safety, lighting and energy efficiency too.
It’s true that every construction company is different, and some are more willing (or able) to embrace change than others. But over time the financial, social and environmental benefits of innovative technology in house building will be more and more recognised.
Innovation in building materials
Research and development is also gathering a pace in building materials, including light-emitting concrete, translucent wood, air-purifying bricks and self-healing concrete to name just a few. These all lend themselves to reduced material usage, less energy consumption and better results. Some new building materials are cheaper to produce than the ones before them, or more sustainably sourced. Others are more durable and longer lasting, and offer improved functionality.
Plus - R&D Tax Credits can help finance the costs
Latest HMRC statistics around UK R&D show that 2,025 construction industry businesses claimed more than £135 million in R&D tax relief during the 2017-18 financial year. But with 343,000 construction businesses in the UK this means only around 0.7% of the UK construction industry made a claim. And as we know, innovation in construction is happening constantly, making it clear that many are simply not claiming. So if you work in this sector, don't miss out on what could be tens or hundreds of thousands of pounds of cash.
What are R&D Tax Credits and what costs are eligible?
The UK R&D Tax Credit scheme rewards businesses for being innovative by slashing their Corporation Tax bill by up to 33 pence for every £1 spent on R&D (research and development) projects.
All UK companies from SMEs to large corporations can make a claim, as long as their work seeks to increase overall knowledge in the field of technology or science. It must also benefit the wider sector, not just the company itself, and some kind of scientific or technological innovation must have taken place. This of course happens a lot in construction!
Even projects that were unsuccessful can be eligible, and companies that made a loss can receive the relief in cash instead. Eligible costs include staffing and subcontractor payments, materials, overheads and more - so we’re talking serious money here.
See our R&D Tax Credits page to find out more, plus our free R&D Tax Credits calculator to see what you could claim. We also recommend reading our recent blog: 8 Common Mistakes Companies Make When Claiming R&D Tax Credits.
How the Tax Cloud portal takes the hassle out of claiming
Offering an easy, low fee solution to R&D Tax Credit claims, the Tax Cloud portal for businesses offers a straightforward online service with no upfront fees or minimum contract period. It’s fully guided and supported by the R&D experts at Myriad Associates, and we’ll make sure it’s totally optimised and watertight before being sent to HMRC.
Try the Tax Cloud portal for businesses today or call us on 0207 360 4437.
- Submitting R&D tax claims since 2001
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- Over £70m claimed and counting
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