If we are to look beyond covid-19 and Brexit, the sector must galvanise forward-thinking attitudes. Sponsored by Haines Watts
The construction industry has always been a key player when it comes to our economy. But to be able to thrive as we look to recover from covid-19, innovation will need to sit front and centre.
From increasing efficiencies in the building process, to experimenting with new materials in order to reduce costs or improve sustainability, construction leaders constantly need to be asking: ”Can we do this better?”
Yes, innovation can be intimidating. There are risks involved, which can cost time and money. Sometimes, the rate of technological advancements in other industries can leave the construction industry feeling slightly dazed. But, if you take a step back and invest some time, you soon realise there are opportunities everywhere.
If we are to look beyond covid-19 and Brexit, and aim to improve productivity and profitability, the sector must galvanise forward-thinking attitudes. Innovation will be crucial to the long-term success of the construction industry, ensuring we come out of the other side of all this stronger and more resilient.
Innovation in the industry
A recent ONS report has signalled a sharp decline in the number of UK construction firms that are actively innovating. In the last two years, statistics suggest a drop from 44% to 30% in construction companies that are “innovation active”. This is the lowest it has been since the financial crash.
But across the world, we are seeing significant technological advancements in the construction process: from the rise of 3D printing, allowing companies to print out entire buildings, to virtual reality software being used in the planning stages. Australia and America have even successfully developed bricklaying robots, which automate a large part of the housebuilding process.
This is obviously at the far end of the scale, but there is a great deal to be learned from those at the forefront and plenty of more achievable pursuits within touching distance.
One simple creative idea can completely transform the way you and your team operate – drastically improving your efficiency, performance and profitability
The importance of being innovative
Innovation does not necessarily mean developing a ground-breaking concept that makes front-page news. It can be as simple as improving the way you work and uncovering new ways to do things.
One simple creative idea can completely transform the way you and your team operate – drastically improving your efficiency, performance and profitability, and giving you the confidence to take those all-important risks further down the line.
Successful innovation enables businesses to punch above their weight. It saves time and money. It breeds new opportunities. And, ultimately, it gives you a competitive edge when looking to grow.
The most effective organisations embed innovation as part of their culture. Having a dedicated innovation budget and process is one way of ensuring new thinking is always front of mind.
Some of the most important solutions and innovative ideas come from those on the ground. Creating an open forum for ideas to work their way up to management is key.
Tried and tested methods can be dependable and sometimes seem the best way of doing things. But, as the old saying goes, success breeds complacency and complacency breeds failure.
If you are developing new methodologies, solving technical problems or improving quality, performance and safety, there is a good chance that you will qualify for research and development tax credits
Cost factors are understandably one of the biggest barriers to innovation. Job redundancies are a real prospect facing many and with profit margins under pressure, investing in anything outside of your day-to-day operations can seem daunting and a risk not worth taking right now.
However, there are a range of financial support measures in place, designed specifically to drive spending on innovation. Only last week, the government unveiled its Sustainable Innovation Fund – a £200m support package to help innovating and sustainable businesses recover from the coronavirus outbreak. If you are tackling energy efficiency in buildings, this grant could help bring your research and project to life.
Over the years, I have worked with countless owner-managers who have not been aware that their day-to-day activity could be categorised as innovative activity in relation to corporation tax relief. The mere processes of trying to improve upon and advance something regardless of its success can bring with it substantial financial benefits.
If you are developing new methodologies, solving technical problems or improving quality, performance and safety, there is a good chance that you will qualify for research and development tax credits. Moreover, if your work is patented, you could apply for relief via the patent box too. Such claims can unlock significant amounts of cash from within your business, offering an invaluable opportunity to reinvest and fuel future growth.
If your work is patented, you could apply for relief via the patent box too. Such claims can unlock significant amounts of cash
The future of construction
Despite the challenges that the industry is facing, it is crucial that innovation underpins everything.
In the first instance, businesses need to take advantage of the funding on offer. That can start with investigating whether you are already eligible for research and development tax credits and the patent box. Companies will quickly find their investment in innovation reaping greater returns by utilising the government support available.
Embedding a culture of innovation is a far greater task. But you can start by speaking to your teams and your suppliers – quick wins are often much easier than you may think. Looking forward, it is going to be crucial to adopt an innovative mind set and to be willing to take risks.
Haines Watts is delighted to be involved in sponsoring and supporting the AYA awards – which recognise achievement, innovation, creativity and the talent that exists in the UK’s architectural and built sector. Awards like these evidence that innovation does thrive and long may it continue.
How we can help
Haines Watts work with many of the UK’s privately owned construction firms and related businesses. We help owners evaluate their long-term goals, funding needs and associated tax planning opportunities. We have a track record in supporting the construction and architectural sectors with R&D tax claims.
If you want to explore whether your business could be claiming for R&D tax relief or to find out how we can help you position your construction business for recovery and long-term success, please get in touch.
Jonathan Scott is a partner at Haines Watts.
He specialises in advising growing businesses and their high-net-worth owners. He works alongside owner-managers, offering commercially focused advice on a wide range of tax matters. His expertise covers everything from tax incentives and reliefs, to income tax planning, company reorganisations and inheritance tax.
Working with a wide variety of construction leaders over the years, Jonathan understands the unique set of challenges the industry faces. He helps business owners navigate this ever-evolving sector with advice that cuts through the noise and expertise that adds tangible value.
Whether it is supporting business growth or maximising a firm’s profitability, Jonathan provides construction companies with smart advice and innovative solutions to help them achieve their strategic goals.