UK architects are among the most creative and innovative in the world. However, many architectural practices are not taking advantage of the Government’s Research & Development (R&D) tax incentives.
Each year the Government, through the tax system, provides approximately £1 billion of support, to over 9,200 companies for over £10 billion of R&D expenditure.
The Royal Institute of British Architects (RIBA) has recently published free guidance for architects on the tax credits that are available for R&D ‘UK Research and Development Tax Credit Scheme – a guide for architects’. This has been published in response to Institute concerns that architects may be unaware they are missing out on thousands of pounds in tax credits for their R&D work.
There have been a number of changes to the R&D tax relief scheme since it was introduced in 2000, with the majority of these changes being advantageous for the companies claiming the relief. For instance, since 1 April 2012 the rate of the enhanced R&D tax deduction has increased to 225%. Thereby a company incurring £100,000 of R&D expenditure could potentially claim an additional £125,000 tax deduction (i.e. in addition to the £100,000 actually spent). This could reduce the company’s tax liability by an additional £30,000.