Loading…

Top tips for architects when claiming R&D tax credits

Architects often take high risks to develop building designs and this creativity and innovation is a perfect fit with the R&D tax credits scheme. To help you make the most of your claims, we're sharing our top tips below.

1. Start high level

Preparing an R&D claim can seem complex when focusing on the finer details of a project. At this initial stage, many architects feel frustrated or simply don’t have the time to labour over an intensive claim, reverting instead to getting stuck into their next project. Our advice is to keep the assessment at a high level to start with, identifying each of your projects where qualifying R&D is taking place and then concentrating on fine-tuning the details where the process becomes more complex.

2. Be careful not to rely on assumptions

The RIBA Plan of Work is a helpful guide for planning a R&D claim review, but items that are eligible under one stage may not be eligible under another. Architects can use sampling approaches that minimise the disruption to the business when preparing an R&D claim, but they need to be tested thoroughly to ensure they’re statistically meaningful. Failing to do so could lead to a material overstatement of the claim that may cause an enquiry from HMRC, or conversely, this approach could lead to work being overlooked.

For example, regulation is constantly changing and it is likely that the first few buildings dealing with a major change in regulations would involve eligible R&D. But over time, this design work becomes common and the amount of eligible work will decrease. Architects should review their claim methodology each year and remain open minded about refreshing their assessment strategy. If an inspector asks a question about your claim, you need to be able to justify the individual project rather than presenting assumptions based on previous claims.

2. Know the difference between science and the arts

Architects should take extra care when the challenges within a project relate to social sciences or the arts. In the creative sector, technology and the arts can become intertwined and the R&D claim needs to exclusively focus on the technology strand of the project. When an architectural practice carries out extensive research as part of a project, it does not always mean that the work qualifies for R&D.

For example, researching the architectural language used in a specific location will not be eligible for R&D in the tax context, as it is not related to a field of science or technology. If you face uncertainties due to the complexity of working with a variety of people, this will also not be eligible.

4. Don't forget about claiming for collaborate work

Architects and designers often require the expert advice of manufacturers and other professionals in order to find the optimal product or material to achieve the desired finish for a project and this collaborative work with third party professionals is essential to product development.

In order for you to determine if your contribution to the project is eligible to claim for R&D, you should first establish the technical ownership of the work. Consider whether the third party brought the product to you, or if the product was created as a result of the collaborative work between both parties. Also determine who was actively involved in the resolution of the technical uncertainties. If your design team was involved in the specification, testing and proving of the new product, this indicates that you were directly involved in the R&D work and therefore you would be able to claim for these activities.

In order to claim successfully for collaborative work, we recommend that you record evidence of the technical ownership and when possible time-bookings with details of the work carried out by the designers in your team. Then when it comes to preparing your R&D claim, these records will facilitate in determining what work should be included.

5. Go beyond cosmetic and aesthetic effects

Legislation states that aesthetic aspects are not, of themselves, science or technology. So the work architects do to improve or generate an aesthetic appeal of a process or material is not considered R&D for tax purposes. However, if this aesthetic finish was not readily achievable or if it was accomplished through the application of science or technology, it could represent a qualifying advance. 

About the author

Iain Butler

+44 (0)20 7556 1343
butleri@buzzacott.co.uk
LinkedIn

1. Start high level

Preparing an R&D claim can seem complex when focusing on the finer details of a project. At this initial stage, many architects feel frustrated or simply don’t have the time to labour over an intensive claim, reverting instead to getting stuck into their next project. Our advice is to keep the assessment at a high level to start with, identifying each of your projects where qualifying R&D is taking place and then concentrating on fine-tuning the details where the process becomes more complex.

2. Be careful not to rely on assumptions

The RIBA Plan of Work is a helpful guide for planning a R&D claim review, but items that are eligible under one stage may not be eligible under another. Architects can use sampling approaches that minimise the disruption to the business when preparing an R&D claim, but they need to be tested thoroughly to ensure they’re statistically meaningful. Failing to do so could lead to a material overstatement of the claim that may cause an enquiry from HMRC, or conversely, this approach could lead to work being overlooked.

For example, regulation is constantly changing and it is likely that the first few buildings dealing with a major change in regulations would involve eligible R&D. But over time, this design work becomes common and the amount of eligible work will decrease. Architects should review their claim methodology each year and remain open minded about refreshing their assessment strategy. If an inspector asks a question about your claim, you need to be able to justify the individual project rather than presenting assumptions based on previous claims.

2. Know the difference between science and the arts

Architects should take extra care when the challenges within a project relate to social sciences or the arts. In the creative sector, technology and the arts can become intertwined and the R&D claim needs to exclusively focus on the technology strand of the project. When an architectural practice carries out extensive research as part of a project, it does not always mean that the work qualifies for R&D.

For example, researching the architectural language used in a specific location will not be eligible for R&D in the tax context, as it is not related to a field of science or technology. If you face uncertainties due to the complexity of working with a variety of people, this will also not be eligible.

4. Don't forget about claiming for collaborate work

Architects and designers often require the expert advice of manufacturers and other professionals in order to find the optimal product or material to achieve the desired finish for a project and this collaborative work with third party professionals is essential to product development.

In order for you to determine if your contribution to the project is eligible to claim for R&D, you should first establish the technical ownership of the work. Consider whether the third party brought the product to you, or if the product was created as a result of the collaborative work between both parties. Also determine who was actively involved in the resolution of the technical uncertainties. If your design team was involved in the specification, testing and proving of the new product, this indicates that you were directly involved in the R&D work and therefore you would be able to claim for these activities.

In order to claim successfully for collaborative work, we recommend that you record evidence of the technical ownership and when possible time-bookings with details of the work carried out by the designers in your team. Then when it comes to preparing your R&D claim, these records will facilitate in determining what work should be included.

5. Go beyond cosmetic and aesthetic effects

Legislation states that aesthetic aspects are not, of themselves, science or technology. So the work architects do to improve or generate an aesthetic appeal of a process or material is not considered R&D for tax purposes. However, if this aesthetic finish was not readily achievable or if it was accomplished through the application of science or technology, it could represent a qualifying advance. 

Speak to an expert
Speak to an expert

For more information on how to prepare successful R&D tax credit claims and determine which of your projects are eligible, please get in touch.

Please complete all required fields above.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
You might also be interested in… Event overview: R&D tax credits for architects

At our latest breakfast roundtable for architects, there were attendees from larger practices looking for guidance on how to improve their claims and others from smaller firms who had heard of R&D tax credits but were unsure which of their projects were eligible. 

As a start, I provided some background information on the innovation incentives available to architects. Those practices that were unfamiliar with the scheme wanted to know more about what was involved in the claims process so we discussed the documentation required, which accounting periods could be claimed and the benefits R&D tax credits provide. We also discussed what size a practice needs to be in order to benefit from the tax relief. This highlighted that the scheme is not just for larger firms but also identified how projects funded by a third party can be claimed under the large company scheme. 

Determining what architectural projects are eligible

Attendees gained further understanding of which of their projects are eligible for R&D tax credits as we discussed the application of new materials, new construction methods and solar thermal cladding. This was put into perspective as a larger practice shared their own experience and highlighted projects that they had successfully claimed for in the past. 

There was uncertainty around how to claim projects undertaken for the benefit of the practice rather than focused on one specific building and a number of questions arose around claiming Building Information Modelling (BIM). Many firms have a specialist who develops scripts and libraries to support the use of BIM technology so we discussed how the claim would need to separate routine support activities from development of tools when making the claim and how these two different activities might be claimable under the scheme.  

Keeping HMRC on side

HMRC are looking to make changes that will decrease the length of documents they review in support of R&D tax credits. This will help to reduce the time it takes to create the documentation in support of a claim but is not yet confirmed so we also highlighted the current project coverage requirements. As a recommendation, we suggested that the attendees follow the HMRC online form as a basis, but work with an experienced advisor in order to include the relevant information and submit claims efficiently and successfully. 

I concluded the session by sharing the secrets to positive interaction with HMRC and provided some solutions to the common challenges architects face when claiming R&D tax credits. It was a thoroughly enjoyable morning and I am looking forward to working with these architects in the future. 

Interested in attending our next event?

If you would like to attend our next roundtable or if you’re an architect yourself and have any questions around R&D tax credits please get in touch.

About the author

Iain Butler

+44 (0)20 7556 1343
butleri@buzzacott.co.uk
LinkedIn

At our latest breakfast roundtable for architects, there were attendees from larger practices looking for guidance on how to improve their claims and others from smaller firms who had heard of R&D tax credits but were unsure which of their projects were eligible. 

As a start, I provided some background information on the innovation incentives available to architects. Those practices that were unfamiliar with the scheme wanted to know more about what was involved in the claims process so we discussed the documentation required, which accounting periods could be claimed and the benefits R&D tax credits provide. We also discussed what size a practice needs to be in order to benefit from the tax relief. This highlighted that the scheme is not just for larger firms but also identified how projects funded by a third party can be claimed under the large company scheme. 

Determining what architectural projects are eligible

Attendees gained further understanding of which of their projects are eligible for R&D tax credits as we discussed the application of new materials, new construction methods and solar thermal cladding. This was put into perspective as a larger practice shared their own experience and highlighted projects that they had successfully claimed for in the past. 

There was uncertainty around how to claim projects undertaken for the benefit of the practice rather than focused on one specific building and a number of questions arose around claiming Building Information Modelling (BIM). Many firms have a specialist who develops scripts and libraries to support the use of BIM technology so we discussed how the claim would need to separate routine support activities from development of tools when making the claim and how these two different activities might be claimable under the scheme.  

Keeping HMRC on side

HMRC are looking to make changes that will decrease the length of documents they review in support of R&D tax credits. This will help to reduce the time it takes to create the documentation in support of a claim but is not yet confirmed so we also highlighted the current project coverage requirements. As a recommendation, we suggested that the attendees follow the HMRC online form as a basis, but work with an experienced advisor in order to include the relevant information and submit claims efficiently and successfully. 

I concluded the session by sharing the secrets to positive interaction with HMRC and provided some solutions to the common challenges architects face when claiming R&D tax credits. It was a thoroughly enjoyable morning and I am looking forward to working with these architects in the future. 

Interested in attending our next event?

If you would like to attend our next roundtable or if you’re an architect yourself and have any questions around R&D tax credits please get in touch.

Read more…

close back
Your search for "..."
did not yield any results.
... results for "..."
Search Tags