1 in 4 construction firms has never claimed — or even heard of — R&D Tax Credits. The scheme pays back up to 20p per £1 spent on qualifying innovation work. Construction accounts for only 0.2% of successful claims despite carrying out R&D activity that qualifies under HMRC’s definition.
The awareness gap is not a minor administrative oversight. It represents a significant, recurring missed opportunity at exactly the moment the sector needs investment in its own knowledge base most. (Source: HMRC R&D Tax Credit Statistics, 2024)
construction firms has never claimed R&D Tax Credits — and roughly the same proportion have never heard the scheme exists. Construction accounts for 0.2% of total successful claims, despite the fact that qualifying R&D activity is widespread across the sector.
The most common reason AEC firms do not claim is the belief that R&D Tax Credits are for laboratories and technology companies. That belief is wrong, and it is expensive.
HMRC’s definition of qualifying R&D does not require a dedicated research function. It requires that your team worked to resolve a scientific or technological uncertainty — something that could not be resolved by a competent professional using standard practice. In AEC, that description applies to a substantial portion of what specialist teams do on projects where the technical challenge is genuinely novel.
Bespoke facade systems designed to resolve performance uncertainty. Novel structural approaches applied to unusual geometries. Net zero strategies developed for building types or configurations without established precedent. Fire engineering solutions for scenarios outside standard guidance. All of these can qualify — but only if the work is identified and documented with the claim in mind.
The second barrier is documentation. Qualifying R&D activity is often embedded in project delivery — it happens alongside design and construction work, spread across team members and project folders. By the time a firm considers making a claim, the evidence is scattered or partially lost.
The firms that claim successfully tend to be those that have structured their R&D identification earlier — either as part of their innovation management practice or through specific tracking tools that capture qualifying activity in real time. Reconstructing a claim at year end from memory is harder, produces weaker evidence, and often results in undervalued claims or no claim at all.
This is the structural problem: the sector underinvests in the processes that would help it capture the value of the work it is already doing.
Under the current merged R&D scheme, qualifying expenditure attracts an additional 20% tax deduction — effectively returning up to 20p per £1 spent on qualifying work. For an SME spending £200,000 on qualifying R&D activity in a year, that is a £40,000 benefit. For larger firms, the calculation is different but the scale of the opportunity is comparable.
The average successful construction claim is worth approximately £51,000 (HMRC, 2024). For specialist AEC teams working on technically complex projects, claims substantially above that average are not unusual when the qualifying activity has been properly identified and documented.
The most effective approach is to integrate R&D identification into how projects are run — not to bolt a claims process onto year-end accounts. That means having a framework for recognising qualifying activity when it occurs, and a tracking system that captures the evidence as work progresses.
TrueTrack R&D was built specifically for this: it maps qualifying work against claim categories as projects progress, so the evidence is current rather than reconstructed. For organisations that want to understand what qualifying activity they may already be carrying out, the Advisory Partnership can provide the diagnostic and the structure to act on it.