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Architecture & Engineering

 
HMRC R&D Tax Credit Statistics for 2023-24
2,350 Claims
£295 Million Claimed in this Industry
£98,827 Average Claim Size
HMRC Band M71 - Architectural and engineering activities; technical testing and analysis
INTRODUCTION

Understanding R&D within Architecture

Research and Development (R&D) tax relief is a financial incentive that can be claimed by qualified architectural firms, offering significant financial benefits for innovative projects.

However, navigating the complexities of what qualifies as R&D in architecture can be challenging. To qualify for R&D tax relief architectural projects must meet specific criteria set by HMRC. These criteria require that the work involves an attempt to advance science or technology, which is distinct from routine architectural tasks such as standard design and planning. The key to eligibility lies in addressing technological uncertainties that cannot be easily resolved by a competent professional in the field.

 

 

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Core Sectors Within Architecture

The six main industry areas that make up architecture
Residential Focuses on the design and construction of living spaces.  
Commercial Encompasses the design of spaces intended for business, trade, and enterprise.  
Institutional/public: Schools, universities, government buildings, and other public-use places.  
Industrial Factories, warehouses, and production facilities.  
Healthcare Hospitals, clinics, and medical centres.  
Hospitality Hotels, restaurants, and leisure venues.  

Examples of R&D activity in Architecture

  • New Building Components
    The development of new elements such as facades, canopies, and features in difficult environmental conditions that involve intricate and complex design.

  • Technical Challenges in Building Performance
    Solving previously unaddressed issues related to energy efficiency, thermal performance, or structural integrity.

  • New Materials and Techniques
    Experimenting with novel materials to enhance durability, sustainability, or safety, and developing prototypes to test new construction methods. 

  • Regulatory Compliance
    Conducting extensive testing to ensure compliance with building codes and regulations when using innovative materials or techniques.
  • Custom AI and Parametric Design Tools
    Developing bespoke AI algorithms or parametric design tools to optimise structural efficiency, energy performance, or construction processes.

  • Advanced BIM Applications
    Pioneering the use of Building Information Modeling (BIM) beyond standard industry practices to enhance collaboration, precision, and innovation in design and construction.



Architectural projects may include sustainability initiatives, listed buildings, complex site conditions, changing regulations, advanced engineering solutions, value engineering with innovative materials or techniques, and new build methods. This list isn’t exhaustive, and each project should be assessed on its own merits to identify potential R&D opportunities.

What Does This Relief Translate to in Real Terms?

To help bring this into context, we've included a selection of anonymised client examples showing the types of projects that have qualified, along with the level of relief they were able to claim.
View Examples

What doesn’t count as R&D in architecture

  • Aesthetic or stylistic design work
  • Market research for building projects
  • Standard code compliance and regulatory submissions
  • Construction drawings and documentation for production
  • Project management and contract administration
  • Using off-the-shelf construction materials as intended
"Wilby Jones are our R&D consultants. They are a pleasure to work with, very organised, professional and knowledgeable in what they do and more specifically when it comes to R&D and architecture. Amy at Wilby Jones has been working with us for a few years now, she is always responsive and happy to help with our queries. Amy also takes the time to explain regulation changes and keep us informed. We enjoy working with their team!"
adjaye logo
Adjaye AssociatesArchitectural and urban design
INSIGHTS PREVIEW

WHAT WE HAVE TO SAY

Our fantastic team of report writers have prepared articles covering the land of tax extensively. If you have a question relating to accounting or tax, it's likely we've already written the answer.

Development of Sustainability Strategies using AI

Client Q&A: Felix Finkernagel of Finkernagel Ross

Your R&D expert

Pia finds it fascinating to learn about her clients’ new architectural projects and takes pride in the significant role Wilby Jones plays in their success and recognition. With expertise in Architecture, she particularly enjoys supporting practices as they bring innovative designs and developments to life.

Pia
Pia Jackson - Client Tax Manager
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The Claim Process

We understand the complications that can often arise when completing an R&D claim, not to mention the significant amount of time it can consume, diverting your attention from driving your innovation forward. That's why we have streamlined a transparent and hassle-free process that follows a step-by-step approach from start to finish.

Throughout your R&D claim process, we maintain open lines of communication tailored to your preferences. Once we have compiled comprehensive technical and financial reports, we take the responsibility of submitting them and proactively follow up with HMRC, leading the communication on your behalf. Often, our next contact with you brings the exhilarating news of success and positive outcomes.

  • Step 1

    We'll gain your authorisation via our client instruction form/NDA. This will enable us to discuss your R&D activities along with your current tax position. This will enable us to discuss your R&D activities along with your current tax position.

  • Step 2

    We'll analyse the profit & loss (P&L) statement of the business while facilitating your technical call. This step aims to determine whether your case is feasible from both technical and financial perspectives.

  • Step 3

    Once our experts are confident that your case meets the R&D eligibility criteria, we will then gather all the required technical information and financial documentation according to HMRC's standards to support your case.

  • Step 4

    At this stage, we initiate a stringent compliance procedure that we have developed in-house to audit your R&D claim application. We verify whether it meets the defined standards before submitting it to HMRC to ensure a positive outcome.

  • Step 5

    After conducting a comprehensive review of your R&D claim, including all required documentation, the application will be forwarded to HMRC for further processing.

  • Step 6

    Our team maintains continuous contact with HMRC regarding your case. If any queries arise, we address them on your behalf using a highly systematic approach to maximise your outcome while minimising any delays in your repayment.
HOW EFFECTIVE ARE

DSIT Guidelines

The DSIT Guidelines form the foundation for compliance when preparing an R&D claim. In conjunction with the wider scope of HMRC’s guidance in relation to R&D Tax Relief, they set out how to determine whether work qualifies and provide practical examples of how to apply the criteria to evidence R&D within a project. These guidelines should not only underpin the assessment process when compiling a claim but can also be referenced during an enquiry defence if required. By demonstrating to HMRC how a project aligns with the definitions and scenarios outlined, you can clearly evidence that the innovation undertaken qualifies for R&D tax relief. Below are five of the guidelines we most frequently rely on to support qualifying work. 

DSIT 3 Software projects aim to advance knowledge or capabilities within the sector, often addressing challenges in system architecture, platform integration, or scalable software design.  
DSIT 7 Companies often seek to advance a field of science or technology which can have either tangible consequences, such as improving the security of a system by implementing a segmented software architecture for an existing system; or intangible consequences, such as new knowledge regarding integrations of legacy products or the behaviour of various data structures.   
DSIT 9 A project may extend overall knowledge, create a process or device, make an appreciable improvement to an existing process, or duplicate the effect of an existing product, to name a few types of qualifying activity.  
DSIT 11 If a particular advance in software engineering has already been made or attempted but details are not readily available, work to achieve such an advance is R&D. For example, where a software company has already developed a process that could more accurately consolidate disparate data sets, but the process is a trade secret, a company seeking to develop a similar process is still considered R&D.  
DSIT 21 Overall knowledge or capability can still be advanced in situations where companies are working in the same field independently, work is a trade secret, or where the details are not readily available; even where it is known that a particular advance has already been achieved.   

HMRC often reference software development examples throughout its guidance.

Drawing direct comparisons to HMRC’s own examples offers a clear and simple way to evidence compliance in R&D projects, whether relating to a single technical detail or an entire scheme. 

The following pages set out examples drawn directly from HMRC’s published guidance, which we reference where relevant within our reports. 
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A company is conducting R&D in the development of a software service for the commercial banking market in the US. Development requires the company to have a collocated team in the US due to access regulations within the US banking sector. This requires conditions (the presence of US banking systems and regulatory requirements) which are not present in the UK, and which would be wholly unreasonable to replicate. 

This condition exists in the US. Therefore, this activity would satisfy CTA09/1138A if undertaken in the US, where the necessary conditions arise. Under the new ‘merged’ R&D scheme, overseas costs that used to be claimable may be blocked from a claim and so it’s important to ensure your work remains compliant in the modern R&D landscape.

CIRD152000, Example 5

In determining the relevance of your R&D work, we firstly assess whether the work advances your field of science of technology, however we then need to consider what makes your work technologically or scientifically uncertain. A technological or scientific uncertainty exists when knowledge of whether something is scientifically possible or technologically feasible, or how to achieve it in practice, is not readily deducible or available by a competent professional working in the field as per S.13 DSIT guidelines.

CIRD81960

Managing Enquiries - Case Studies?

The following examples illustrate how investing in R&D can deliver tangible results, especially in complex software projects. They are presented from a tax perspective rather than a technical viewpoint, explaining projects in a way that HMRC will recognise and accept, rather than using traditional industry language. Each study focuses on how the project is described, rather than providing a full breakdown of the DSIT guidelines applied. For further detail, more comprehensive case studies are available on the Wilby Jones website.

CONCLUSION

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Explore additional solutions for your Life Science project

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