Recently, I had the privilege of attending the Design and Engineering Expo at NEC Birmingham. It was a vibrant congregation of industry innovators and future-focused thinkers. It was great to see some of our clients as exhibitors and I must say I was seriously impressed with anything which involved VR or Robotics!
Throughout the event, one topic stood out as a prevailing undercurrent: the evolving role and potential of Research and Development (R&D) tax credits and capital allowances for structures and buildings in the design and engineering sector.
For decades, R&D tax credits and capital allowances have played a crucial role in encouraging businesses to invest in innovation. These provisions allow companies to recoup a percentage of their costs associated with research and development, thus reducing their tax liability. Meanwhile, capital allowances for structures and buildings offer tax relief on investments made in non-residential structures and buildings.
At the expo, the future of these tax provisions was explored, emphasising their potential in empowering design and engineering firms to embrace next-generation technologies and concepts.
One of the key discussions was the increasing intersection of design, engineering, and technology. As we move towards a future dominated by artificial intelligence, machine learning, and data analytics, R&D is no longer confined to labs or prototype development. It's becoming an integral part of the design and engineering processes. Therefore, it's expected that government bodies worldwide will revise and expand their R&D tax credits to encompass these novel activities.
Another central theme was sustainable and environmentally friendly design. Many future-forward firms are conducting R&D to create more efficient, eco-friendly, and sustainable designs. The existing capital allowances for structures and buildings might also evolve to reward businesses investing in greener infrastructure.
The expo also shone a light on the role of R&D tax credits in promoting inclusion and diversity in design and engineering. Tax incentives could be tailored to encourage businesses to conduct research and create designs that are inclusive and accessible to all.
The critical takeaway from the expo is that, in the future, R&D tax credits and capital allowances for structures and buildings will become even more instrumental in fostering innovation in design and engineering. However, the definitions of eligible activities and investments may need to evolve to reflect the changing landscape of these fields.
As a tax advisor specialising in these areas, I am excited about these prospective changes. I believe they will offer businesses greater opportunities to invest in cutting-edge research, sustainable structures, and inclusive designs. I'm also looking forward to helping businesses navigate these changes and maximise their tax benefits in this evolving landscape.
Remember, tax is not just a cost. It's a strategic tool that, when leveraged correctly, can significantly fuel your business's innovation and growth. As the future of design and engineering unfolds, R&D tax credits and capital allowances will continue to play an integral role in shaping this exciting landscape.
