Architects are amongst the very few providing custom design services in our current product saturated society. Most of the buildings that surround us have evolved from an interactive and experimental process involving bespoke solutions, innovation and emerging technologies. These things have all of the makings of a successful R&D tax relief claim. Don't let the word 'tax' scare you off, instead let us explain how it works and why many architects are great candidates for R&D tax relief.
Research and Development (R&D) tax relief is a UK government initiative to encourage and reward companies that are investing in innovation.
If you are solving industry problems, experimenting with the latest technologies, creating bespoke solutions and utilising new materials, you possibly have a claim.
We often find that architectural clients don't realise that what they are doing could be innovative, instead, they consider it simply as 'problem-solving', however, we are here to help!
Design on its own is unlikely to qualify for R&D tax relief. However, if you any of the following, you most likely can benefit from the relief:
For each client innovation looks different; whether it was building on a tight site with planning restrictions, researching bespoke solutions or cost-effective shortcuts or managing environmental risks, all these have R&D tax relief potential.
In order to qualify for R&D tax relief, your attempt doesn’t have to be successful or even be a new building or product. A significant expense for architectural firms is incurred when creating models and prototypes to ensure that their innovations perform as expected. However, did you know that you can claim these costs back through R&D tax relief?
Our recent client had to reduce overheating in a building without compromising the architectural design. The client modelled each flat and ran various simulations in order to find a bespoke solution that would work within the given constraints. Going through the testing phase, prototyping and solutions phases, meant that the business was able to claim for this project alone more than 173K in staff and consumable costs. How much can you claim?
Another client's had to create a suspended spiral staircase with minimal vibrations that connected the mezzanine to the ground floor, working within very tight existing building constraints. Although the materials they used were not unique, the way they combined them to handle site constraints meant that the business was able to claim for this project around 228K in R&D tax relief.
Each new project comes with unique challenges and if it required some scientific and/or technological ingenuity and there were elements of uncertainty then there is an R&D tax relief claim.
Claiming R&D tax relief can save you money and give you the financial buffer to experiment, try new things and not be afraid of failing. R&D tax relief rewards innovation and sometimes to get there, we need to be creative and fail.
The money spent on innovation can be claimed back and used for anything. From recruiting more architects and developers to prototyping with new materials or simply reinvesting it back into the business, the more money you spend on R&D, the more you can claim back. So it is worth looking into R&D tax relief.
Having worked with Novel, it created a sort of paradigm shift in how we’re going to approach projects in the future. We are now not as dismissive of the creative process and attacking unknowns head-on, which not only makes the projects a lot more interesting and widens the scope of our work within the industry, but that we are actively pushing the boundaries of what is architecturally possible.
I think R&D tax relief has a huge potential to impact our industry, not only just our approach to a project. We’ve always been big advocates of failure, a journey of successive failures rather than taking an easy route and having the monetary buffer from R&D tax relief allows us to do just that.
It allows us to experiment, to fail and to sometimes succeed. Whilst success is not guaranteed, it is only by innovating that we may discover something truly different and I think that is fantastic. It can only be a force of good for the industry.
Lionel Real de Azú (co-founder of Red Deer)
Unfortunately, many firms in your industry miss out on R&D tax relief because they think it is too difficult to claim or don't think they have any innovation. Book a call below with one of our consultants and in a free 30 minutes consultation, we will be able to tell you whether you have a qualifying project or not. With the potential to earning back a substantial amount of money for projects done as far back as 2 years, its something your business shouldn't miss.