Thanks to being homebound during multiple lockdowns, DIY fever has gripped many people throughout the UK and Ireland. DIY projects have ranged from small jobs — such as finally hanging the ‘new’ curtains which were purchased back in 2015 — to the more extravagant new home builds. This has resulted in increased opportunities for many companies in the construction industry, both in rectifying DIY disasters and building new dream dwellings.
Large commercial projects are also happening, resulting in work levels not seen since before the financial crash in 2007. However, with the increase in demand, a strain has been placed on the supply of materials. Due to the pandemic, supply chain issues and driver shortages as a result of Brexit, obtaining materials has become extremely complicated. The competitive nature within the construction industry has also forced the price of many materials, such as timber, to record highs.
In addition to immediate material supply challenges caused by the pandemic and politics, long-term shortages are becoming increasingly likely. This is due to the focus being placed on decarbonisation and the desire to limit the construction industry’s impact on the planet. Construction companies and their suppliers are some of the world’s biggest polluters, with some shocking statistics. Take these examples:
- Cement production alone is responsible for more CO2 production than all shipping and aviation activities combined (note that shipping and aviation are heavily taxed because of their emissions)
- 15% of all materials sent to construction sites in the UK end up as waste in landfill
- 60% of all shipped material in the construction industry is packaging
It’s not all doom and gloom however. When faced with challenges, the construction sector often finds very innovative solutions. In order to adapt and overcome the supply shortages in traditional building materials, many companies have begun researching alternatives. Some examples include:
- Developing new low-cost composite technologies to replace traditional timber
- Researching how to reduce the impact and cost of existing manufacturing processes
- Recycling waste materials, such as using plastic as aggregate within concrete
- Researching how materials salvaged from sites could be repurposed
- Using waste by-products to improve the qualities of existing construction materials
- Developing new types of cement which produce less CO2 and even absorb CO2
Companies within the construction industry have been spending more time and money than ever before in order to keep up with demand. They have also been driven by the desire to lessen their impact on the planet. This is in-line with government policies to reduce greenhouse gas (GHG) emissions to ‘net zero’ over the next 20 to 30 years.
R&D Tax Credits to Support Construction Industry R&D
The good news is that government incentives exist to help innovation and diversification within the construction industry. In both the UK and Ireland, R&D Tax Credits schemes enable limited companies to claim a proportion of the wages, consumables, software and sub-contractor costs that they have incurred carrying out R&D.
The schemes are very generous and can give significant tax benefits to construction companies. The rules around them are complex, though, and require specialist advice — which we can give you.
How We Can Help You
At IF R&D Tax Credits we’re here to help you on your journey of innovation and advancement. We can assist you with all your R&D Tax Credit needs and advise you on how to plan for future R&D — to ensure you gain the maximum benefits.
If you would like to know more about R&D Tax Credits, please get in touch to arrange a no-obligation discussion.