Innovation is one of the most important tools for forward-thinking architecture practices. Architecture firms are now pushing the boundaries to embrace R&D as a core part of their design process. This is driven by the industry’s growing recognition that innovation is crucial for success in today’s competitive landscape. From addressing population growth to achieving ambitious sustainability goals, architects are under pressure to develop groundbreaking approaches to design.  

However, achieving these ambitious targets can be extremely cash and time intensive.  The inherent uncertainties associated with pioneering new solutions can be risky to take on. Therefore, it is crucial for architects to maximise the resources they invest in their pursuit of innovation. To mitigate these challenges, architects can leverage R&D tax credits to help push boundaries, experiment with new technologies, and identify innovative techniques, materials, or designs that drive industry advancement.  

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What is the R&D tax relief scheme?

The UK government's R&D tax relief scheme incentivises companies to invest in R&D by offering substantial tax reductions for qualifying activities. This scheme allows firms to either reduce their corporation tax bill or receive a cash credit for innovative work. R&D involves projects designed to advance science or technology by addressing and resolving technical and scientific uncertainties, thereby pushing the boundaries of design and innovation.  

Many architectural projects involve a significant amount of experimentation and problem-solving, which aligns perfectly with the R&D criteria. While innovation is at the heart of the majority of architectural practice, firms may not always recognise their potential for tax relief. By understanding how R&D tax credits apply to your practice, you can unlock valuable financial support to fuel your innovation.

Qualifying R&D Activities in Architecture

The range of qualifying R&D activities in the architecture sector is broad. Potentially qualifying activities include:  

• Developing Sustainable Design Methods: Innovating new approaches to minimise embodied carbon and enhance energy efficiency in building design.

• Testing innovative materials: Evaluating new materials and construction techniques to improve functionality and performance.  

• Retrofitting Historic Buildings: Finding creative solutions to retrofit history buildings while preserving their architectural integrity.

• Reducing Construction Time and Waste: Creating modular, prefabricated designs to streamline construction and minimise waste.  

• Applying Circular Economy Principles: Implementing novel strategies to promote sustainability and resilience in buildings.  

• Exploring Innovative Design Solutions: Utilising methods like Passivhaus to reduce a building’s environmental impact.  

• Enhancing Energy Efficiency: Using advanced thermal modelling and optimising building envelopes to improve energy performance.  

• Developing Fire Safety Solutions: Creating novel fire safety measures to meet complex building requirements.

• Leveraging Digital Design Tools: Designing algorithms for automation and improved workflows.

This is not an exhaustive list. Generally, if your project involves pushing design boundaries through innovative activities, you may qualify for valuable financial support through R&D tax credits. Conversely, if you are using conventional design techniques in routine projects, it is less likely that you will qualify for R&D tax credits.

What costs qualify for R&D tax relief?

• Staff: Includes gross salary payments, employer NIC contributions, employer pension contributions and cash reimbursements.  

• Materials and Consumables: Costs for materials used in developing prototypes, models, or other elements which get used up during the project.  

• Utilities: Expenses for fuel, power, or water.  

• Software: Costs associated with specialised software and tools used to support the R&D project.  

• Hosting and Data: Expenses related to cloud service for hosting applications, databases or other digital infrastructure required for R&D.

• Contracted Out: Fees paid to external contractors hired to perform eligible R&D activities. Note that if the work is conducted overseas care will need to be taken to claim these costs.  

• Eternally Provided Workers: Fees paid to agency workers hired to perform eligible R&D activities. Note that if the work is conducted overseas care will need to be taken to claim these costs.  

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How can we help?

At Folio Partners, we empower architects to maximise their R&D tax relief potential. Our specialist understanding of the sector ensures we can identify all eligible projects and associated costs. We will work closely with you to document qualifying R&D activities and prepare a robust R&D claim. From initial eligibility assessments to analysing financial figures and submitting reports to HMRC, we will support you every step of the way. Explore our case study featuring our work with Red Deer, an architecture firm, on R&D tax relief.

Contact us today to learn how we can support your R&D claim submission. Alternatively, if you're interested in learning more about R&D tax relief within the field of architecture and the benefits of claiming, click here.

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