When people hear “R&D tax credits,” they often think of tech companies or lab-based innovation. But in reality, many construction businesses are missing out on valuable tax relief they’re actually eligible for.
If your company solves problems, improves building processes, or develops new techniques, you may be able to claim Research & Development (R&D) Tax Credits from HMRC.
Let’s break down how it works for construction businesses and whether you might qualify.
🧾 What Are R&D Tax Credits?
R&D Tax Credits are a government incentive designed to encourage UK companies to invest in innovation.
The relief comes in the form of:
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A reduction in your Corporation Tax, or
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A cash rebate if you’re making a loss
Even small construction companies can benefit, claims can be worth thousands, sometimes tens of thousands, each year.
🏗️ What Counts as R&D in Construction?
To qualify, your project must involve a level of uncertainty and attempt to achieve an advancement in science or technology, not just business improvements.
Here are examples of qualifying R&D in construction:
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Developing new construction methods or materials
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Solving site-specific engineering challenges
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Improving energy efficiency or structural performance
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Creating bespoke solutions where off-the-shelf products didn’t work
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Integrating new tech or automating processes
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Designing new foundations for unstable ground
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Finding new ways to comply with building regulations under difficult conditions
✅ Key point: It’s not just about brand-new inventions, improving existing methods also counts.
👷 Who Can Claim?
You can claim R&D tax relief if your business is:
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A UK Limited Company
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Paying Corporation Tax
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Involved in a project that required technical problem-solving or innovation
You don’t need a lab coat or a patent. If your site managers, engineers, or technical staff faced and overcame uncertainties in a project, it might qualify.
📊 What Can You Claim For?
Typical qualifying costs include:
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Staff wages for those directly involved in the R&D
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Subcontractors and agency workers
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Materials used in testing and development
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Software licenses used in the process
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Overheads proportionate to the project
Claims can be made for up to two years after your year-end, so you may already have eligible costs from the last couple of years.
🚫 Common Myths That Stop Construction Firms Claiming
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“We don’t do R&D – we just build stuff.”
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“That’s only for tech companies.”
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“We didn’t invent anything.”
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“We’ve never claimed before, so we must not qualify.”
False. HMRC pays out millions every year to construction firms solving everyday technical challenges.
💡 Real-Life Example
A London-based contractor developed a new drainage solution to deal with a tight urban site and unstable ground. The method involved trial, testing, and input from civil engineers. They recovered over £40,000 in R&D credits.
✅ Think You Might Qualify? Here’s What to Do:
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Identify projects that involved technical uncertainty
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Gather records of time, costs, and who was involved
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Speak to an accountant or R&D tax specialist familiar with construction
👋 Need Help With Your R&D Claim?
At Thomas Emlyn Ltd, we help construction companies identify and submit R&D claims with confidence, often unlocking tens of thousands in tax relief.
📞 Book a quick call with us – and let’s see what your business could be entitled to.
📌 Final Thoughts
R&D tax relief is one of the most underclaimed incentives in the UK construction industry. If your business is improving the way it builds, even just a little, you could be leaving money on the table.
Don’t miss out.
