9TH MARCH, 2021

Why R&D In Construction Is The Key To UK Net-Zero

The answer is R&D

The UK government has pledged to cut carbon emissions to zero by the year 2050; an admirable goal indeed, but one that must be balanced against the need for new infrastructure and housing post-pandemic. The only way both ambitions may be achieved is for the construction sector itself to heavily invest in reducing its own carbon footprint. A massive task calling for cutting edge innovation.

A heavy emphasis is therefore being placed on designing new buildings to be net-zero, or (even better) creating ones which actually generate more green energy than they consume. Research and development is critical.

The challenges

The construction sector, for many reasons, has traditionally been slower to innovate in comparison to other industries. This is certainly not down to a lack of willingness, but more typically a lack of funding. Because margins can be tight, less spare the cash has often be available to throw into innovation projects. This is where R&D Tax Credits can make a massive difference.

Another challenge that commonly crops up in the construction sector is how to attract highly skilled young talent needed to embrace new technologies. In fact, it’s been said that over the next twenty years the construction industry will have to reskill over 600,000 workers to new positions opened up by digital technologies.

Then of course there's the pandemic

The COVID-19 pandemic has been a bit of a double-edged sword for the construction industry. Like many other sectors it has endured a tough twelve months since COVID-19 came on the scene. But fortunately, many construction firms have turned the negative into a positive by grabbing the chance to innovate their way out of uncertainty. The sector has quickly recognised that innovation is the key to survival, and that shelving any plans for R&D is a bad idea.

From the smallest local firms to the largest multinationals, businesses have had to contend with a range of obstacles from shortages in materials and staff sickness to grappling with on-site social distancing. But while the hurdles brought about by the pandemic will still be present for a while yet, the end is (hopefully) in sight. The housing market and house building is bouncing back, with the focus on sustainable construction practices stronger than ever.

Now’s the time to keep pushing forward

The construction sector has historically been a strong one, and with a new generation coming through the ranks progress is gaining momentum.

The government’s commitment to net-zero carbon emissions puts the construction industry front and centre. It requires the entire construction sector to prioritise sustainable innovation through coronavirus uncertainty and beyond.

The benefit of data and analytics

Over recent years the costs involved in integrating IT infrastructure have drastically reduced. Many companies can now set up new systems cheaply and easily, with minimal maintenance. As IT systems these days are often cloud-based, they also lend themselves to remote working 24/7 where needed.

Many construction firms have invested in IT systems to develop tracing and data so they can unearth any kinks in their supply chains. This is especially important for concrete, for example, which makes up around 8% of humanity’s carbon footprint. It’s this kind of technology that not only means firms can successfully innovate, but they can do so sustainably.

Other areas of R&D in construction that are helping achieve the net-zero ambition

Construction firms are now making huge strides in embracing innovative new technologies involving alternative materials, digitalisation and robotics. Many of these come from advances in other fields and collaboration with other sectors, but there’s certainly no shortage of R&D specific to construction. Such R&D has included advances in material science as well as improved knowledge around structures and failure modes, battery storage and other smart solutions.

An essential aim for construction firms going forward must be in utilising these scientific and technological advances in designing new buildings to be net-zero or even energy-positive. Companies should also consider the building process itself, and act immediately to decarbonise energy use on construction sites - especially as diesel is still the most common source of power. Some of the larger contractors are already trialling hybrid generators but further R&D is needed to scale them up. There’s also significant scope for contractors and materials producers to use technology in tackling the huge amount of waste generated in construction. But to achieve this, ongoing R&D will be required around how to re-purpose many more raw materials.

How the Tax Cloud makes claiming R&D Tax Credits easy

R&D Tax Credits offer a financial incentive for companies to innovate. If a firm has developed new products, processes or services, or upgraded existing ones - and a technological or scientific uncertainty has been addressed - then this lucrative tax relief will likely follow. This means the construction industry is well placed to claim high awards (see our article: Why Construction Companies Should Embrace R&D Tax Credits).

Launched by the R&D tax relief experts at Myriad Associates, the Tax Cloud portal helps you put together your claim in four simple steps. Our specialists assess each step as you go through, and the next one will only “unlock” when the one before has been approved.

1) First off, sign up for free by telling us some details about your company which we’ll verify automatically.

2) Next, describe your company’s R&D activities in detail and add in the costs you’ve incurred. You will also need to put together your technical report.

3) At this stage we’ll review your claim and offer feedback.

4) Finally, last checks will be carried out and once you’re happy with everything we’ll submit your claim to HMRC on your behalf. If any further details are required, or questions raised, we’ll deal with them too.

The portal is free to use with fees only payable once your R&D Tax Credits have been awarded. The cost is also lower than our full service offering, and there’s support on hand too any time you need it.

Try the Tax Cloud portal for businesses today and get started on your claim, plus don’t forget to read through our article Why Your Business Needs Tax Cloud. You can also contact us for further advice.

Barrie Dowsett, ACMA, GCMA
Author Barrie Dowsett, ACMA, GCMA CEO, Tax Cloud
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Meet some of the team behind Tax Cloud

Barrie Dowsett Barrie Dowsett ACMA CGMA Chief Executive Officer
Jillian Chambers Jillian Chambers Technical Analyst/Writer
Lauren Olson Lauren Olson Technical Analyst Manager
Rabia Mohammad Rabia Mohammad Corporate Tax Associate