Here are ten tips designed to support architects in making successful R&D tax relief claims.
1. Understand what qualifies as research and development
Familiarise yourself with the criteria for research and development activities. In architecture; this can range from developing innovative construction methods to experimenting with sustainable materials or integrating new technologies into designs.
2. Maintain detailed records
Keep thorough documentation of all your projects. Include initial designs, project notes, challenges faced, solutions attempted, and the results of these efforts, even if unsuccessful.
3. Track time and expenses
Systematically record the time and resources spent on research and development activities. Ensure that staff members log their hours on research and development projects and keep receipts for all related expenditures.
4. Educate your team
Make sure that all team members - especially project managers and lead architects - understand what qualifies as research and development and the importance of documenting their work accordingly.
5. Use a specialist
Consider hiring an advisor who specialises in research and development tax claims and is regulated to provide tax advice, particularly if you have at least eight technical staff.
Their expertise can be invaluable in identifying qualifying projects and expenses and in preparing an accurate and effective claim. They can also review previous years' claims to ensure you included everything accurately. Most providers should include defending claims in any agreement.
6. Stay informed on legislation
Research and development tax relief regulations can change. Stay updated on any legislative changes that could impact your claim or introduce new opportunities for tax relief.
7. Include failed projects
Remember that research and development tax relief is not just for successful projects. Efforts that do not achieve their intended results but seek to overcome technical uncertainties still qualify. This includes competitions too.
8. Identify subcontracted research and development
If you subcontract any part of your research and development work, ensure these costs are identified and claimed where eligible. Understanding how subcontractor costs affect your claim is crucial.
9. Review past projects
Look back at past projects that might not have been claimed under research and development tax relief. It's possible to amend tax returns to include missed qualifying research and development activities from the last two accounting periods.
10. Prepare a robust narrative
When preparing your claim, include a narrative that clearly explains the project, the research and development activities undertaken, the technical uncertainties involved, and how they were resolved or attempted to be resolved. This narrative is crucial for clarifying the nature of your innovation to the tax authorities.
By following these tips, architecture practices can enhance their chances of securing and maximising research and development tax credits, thus fostering a stronger culture of innovation within the firm.
RIBA has partnered with Beavis Morgan to offer research and development tax relief. Beavis Morgan research and development is a specialised division of Beavis Morgan LLP, a well-established, FCA-regulated accounting, tax, and business advisory firm.
Please note, RIBA does not offer corporation tax advice. We provide guidance to practices and information on research and development tax relief solutions for our members supplied by experts.
For more information contact the RIBA Business team at business@riba.org
