Recoup Capital

Businesses in the built environment face challenges on a daily basis. From the pressures to decrease your impact on the planet to trialling concepts or revolutionary plans that will wow your customers, you have to think fast and continually evolve to ensure your business stays relevant, on time and on budget.

But, did you know that those little hacks, work arounds and rejigs can actually count as R&D activity? What’s more, you may be entitled to hundreds of thousands of pounds back in tax relief.

In this article, we’ve partnered with Recoup Capital to discuss how businesses in the built environment sector can benefit from HMRC’s R&D tax relief scheme. We’ll be leaning on Recoup’s Director, Luke Averill and Recoup’s Chief Revenue Officer Joe Averill to discover:

  • What R&D tax relief is
  • Why it’s misunderstood
  • Whether you’re eligible for tax relief
  • How much time an R&D claim takes
  • When you will see the funds
  • Why to choose Recoup Capital

Keep reading to find out how your business can benefit.

What is R&D tax relief all about?

R&D tax relief is a government scheme administered by HMRC that gives UK companies the ability to claim tax relief on their research and development activities. It was first launched in 2000.

Originally, it was for heavily science-based companies. But in 2016 the legislation changed, opening the scheme up to companies in the UK (limited and PLC companies).

Roll forward to 2020 and prime minister Boris Johnson upped the R&D investment from seven billion to twenty-two billion per year. The government wants to reward businesses that are actively overcoming technical challenges and developing innovative products to forward their business. This is where research and development opened up to a much wider range of businesses and sectors – just like ours.

95% of eligible businesses don’t claim

HMRC has reported that only 5% of eligible firms claim under the relevant legislation. This is shocking when you know that the typical SME can reclaim up to 33% of qualifying expenditure in the form of corporation tax credit (for large companies, it is 13% of your qualifying R&D expenditure under Research and Development Expenditure Credit). If a company has paid off its corporate tax, relief can come in the form of a cash payment. Now more than ever, it’s vital companies understand that this opportunity is available to get cash back into their businesses, helping them survive these difficult times.

You’re probably eligible!

People often ask us: is my business eligible? The answer is usually yes.

R&D activities are any aspects of innovation in your business across new products, services, or processes. In essence, this means if you’re spending funds on innovation, you will qualify for a R&D tax claim.

Businesses from all industries are claiming R&D tax credits, including limited and PLC companies. If you’re an SME, the formal prerequisites are:  

  • less than 500 staff 
  • a turnover of under €100 million; or 
  • gross assets of under €86 million.

To check your R&D eligibility, you can either get in touch with Recoup directly or take their free Eligibility Checker quiz today.

Short on time? Recoup only need 2 hours

You’re a busy business owner, and your main concern is how much time and effort the R&D tax relief process will take. We get it.

Take a DIY approach and yes, it’s probably going to be difficult and time-consuming. Get help from a specialist like Recoup and it takes just two hours of your time. That means plenty more time to get on with what you enjoy doing.

What can you expect?

Recoup’s process is quick and easy – but it does require a little bit of admin. Typically, you can ask your accountant nicely and they will be able to easily access this information for you. On average, the process can take between six to eight weeks.

But since the government is trying to get as much money back into businesses as possible due to the pandemic, we’ve seen payments being made between two and four weeks.

The team will require financial information such as:

  • Full accounts for the last two years (you can backdate the R&D claim two financial years)
  • List of your payroll
  • List of your CIS contractors
  • Anti-money laundering (AML) information for one director
  • CT600
  • Tax computations.

You’ll then have a call with Recoup’s chartered tax advisor where you’ll run through the challenges your business has faced in three or four of your projects in the last two financial years. This is to draw out the technical challenges faced around the products and processes you implemented to make aspects of your projects more efficient. Don’t worry, they’ll spend time ensuring you’re fully prepared for the call!

Why Recoup?

Recoup Capital only use chartered tax advisers with 1000 plus successful claims. They have fifteen on their panel, all specialists in their respective industries, including the property sector.

They all have over 15 years’ experience in R&D alone and know how to maximise a claim.

And, although it’s rare, we’ll be ready if HMRC challenge the claim.

It’s rare but can happen, which is why we use chartered tax advisors skilled in R&D rebates.

Out of 4,000 claims, their advisors have had only six challenges that have all been robustly defended.

The national average R&D claim is £52,000. Clients working with Recoup however typically receive £123,000. Why? Because they use only experienced and skilled chartered tax advisors who have detailed knowledge of the R&D scheme, understand how businesses can develop a robust claim and possess an intricate understanding of the tax system.

Why R&D tax relief is a strategic tool

The obvious – R&D tax relief can be used to improve cash flow in the business and reduce your corporation tax bill. But its usefulness stretches even further.

For example, many of our clients use R&D as a strategic tool for the next three years (because the scheme isn’t going anywhere) when costing projects knowing that they can claim 33% of those costs back. It can transform the way you approach projects, opening you up to new opportunities for progress. Research and development in construction is a vital part of the progression of many companies.

Never miss out on R&D tax relief

Gain money you never have to pay back. Money you can invest back into your business to fuel progress far into the future.

Get in touch with Recoup Capital today to find out how they can help you claim up to 33% of qualifying expenditure through R&D tax relief.