Many construction companies are unaware that the SA government offers a 150 % Super Deduction on research and development (R&D) expenses through its R&D Tax Incentive program. Although the R&D Tax Incentive has been effect since November 2006, not many companies have taken advantage of this significant benefit. Whilst some companies are aware of the R&D Tax Incentive, they have not taken advantage of the incentive since they believe that they do not conduct R&D, or that R&D is done exclusively by scientists in white laboratory coats working in a laboratory.

The fact is that the construction industry is one of the prime candidates as an industry that invests a lot in R&D. The construction industry employs engineers, technicians, designers, and machinists who often spend a significant portion of their time developing new designs, improving existing designs and manufacturing techniques – all in an effort to remain competitive and keep up with the latest regulatory and environmental constraints. In responding to the unique requirements of each project and client, the construction industry is engaging in R&D to find new and different solutions to meet the needs of their clients. Furthermore, the ongoing improvement and availability of new materials, design techniques, products and technologies provides the background against which R&D is done. Therefore, the construction industry is involved in R&D every day, and it is important to not only recognise this, but to take advantage of the SA R&D Tax Incentive.

“If the Lord loveth a cheerful giver, how he must hate the taxpayer!”

John Andrew Holmes

If your company operates as a contractor in the construction industry, there is every reason for you to understand whether your projects and activities qualify for the R&D Tax Incentive. For a complimentary assessment, speak with Vantage Advisors to help you understand whether you can claim the tax credits that you deserve.

These are some examples of typical activities that may be eligible for contractors:

• Value engineering
• Improving the overall construction process to increase efficiencies
• Design/build projects
• Pre-construction planning
• Development of means and methods for hard-bid jobs
• Green building design/LEED certification
• Energy-efficient design or improvement
• Experimenting with new material combinations and evaluation of their performance properties
• Development of innovative assembly of construction methods that accelerate or improve the construction process
• Dew point analysis to determine location and type of vapour barrier for walls, roofs and floors
• Designing HVAC systems for airflow and energy efficiency
• Designing electrical systems for efficient power usage
• Plumbing system design for efficient water usage
• Lighting system design for energy efficiency
• Drainage/storm management water management design
• Using building information modelling
• High-tech equipment installation
• Plant production system design