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Architecture and R&D tax credits

Alex Price
Director
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Modern architecture. Orange building. Wooden cladding. Grassy courtyard. R&D Tax credits. The challenge for architects.
Architecture shapes our lives more directly than most fields. Every building we enter represents an idea of how the space in which we live, work, experience culture or commerce, could be.

If I was to realise new buildings I should have to have new techniques. I should have to design them so the machine that would have to make them could make them surpassingly well.

Frank Lloyd Wright

Innovation in Architecture

Architecture thrives on innovation. Before it is built, every building will have evolved through an iterative process in order to achieve a balance between function and experience.In recent years, as a field it has been revolutionised by numerous developments in technology, with new opportunities unlocked.

Why is R&D so important for architects?

Designs can now be rendered and prototyped more realistically and rapidly than ever before. These designs can also be subjected to an ever-expanding range of tests using a variety of newly developed and bespoke software products. New materials can be created, whilst existing materials can be manipulated in new ways. Advances in fields such as 3D printing mean that once impossible shapes can now be created and new construction methods utilised.

The UK is home to many world-leading architectural practices and is known across the world for its innovative architecture. Much of this innovation revolves around designs that tackle the big shared problems of our age head-on, like energy-efficiency, air quality and sustainability. Innovation also lies in using technology to directly challenge what is achievable. With the boundaries between architecture and engineering becoming increasingly blurred along with further advances in robotics, 3D Printing, design software and computer modelling, it really is a brave new world.

What counts as architectural innovation?

Many architectural projects today will involve significant risk-taking, the development and use of bespoke software, adapting the latest technologies to help solve a range of problems, either on-site or during the design stages. Many of these areas may qualify for tax relief under the R&D tax credit scheme.

Research and development often occurs in an architectural project when a design seeks to resolve “a scientific or technological uncertainty.” Any costs incurred in attempting to resolve the uncertainties faced can qualify as research and development. Creative work undertaken on a systematic basis in order to increase the stock of knowledge, including knowledge of man, culture and society and the use of this stock of knowledge to devise new applications could potentially be considered as R&D for tax relief purposes.

When embarking on a project an architect may encounter a problem that means a conventional approach is not possible. It is then necessary  to find a solution that works. A new way of doing things in order to overcome whatever unique set of challenges standing in the way. This requires ‘out of the box’ thinking, research into design, and investigating how clever design and use of technology can be utilised to resolve the scientific or technological challenges that the project presents. In other words, research and development.

Some of the common areas of architectural R&D involve using and adapting technology in a range of ways, like to improve the performance of products/materials and processes. Advances in testing, prototype design and design software to resolve challenges and uncertainties in new materials and technologies can also qualify.

As well as problem-solving, R&D can also occur when systems or processes are appreciably improved. If a more cost effective or less resource intensive method of doing an age-old task has been created then the costs incurred in developing this process could be considered. The demands on architectural practices to create architecturally stunning creations in increasingly challenging locations, and the unique buildings that are often the result demonstrate a huge range of architectural R&D, and the associated costs incurred could potentially qualify for R&D tax relief.

Where doesn’t R&D Occur?

In a routine project where conventional design techniques have been utilised to create the end result it would be unlikely that R&D costs had been incurred, qualifying R&D tends to occur where complex design solutions have been created in response to sometimes unique, but often common challenges faced by architectural firms all around the world.

Architectural Design & R&D

The design stages of an architectural project are often complex and technologically advanced and as such are where the majority of the research and development occurs. Although hand-drawings and sketches are still used, it is computation and parametric tools that make up the bulk of the design phase. The development of new design and computer-aided design tools to resolve challenges or aid modelling capabilities would likely incur qualifying expenditure.

Although using computers as part of the design process is nothing new, in recent times computational design tools have developed significantly. Design software is now often interlinked with fabrication, simulation and modelling tools all unlocking huge potential for architects.

Visualisation

Design tools and software give architects the ability to quickly and accurately visualise their designs as well as test and manipulate them. The process is much easier than ever before thanks to technological advances. Architects can now experience their designs with higher and higher levels of realism, being able to identify flaws that they most likely wouldn’t spot on plans. They can also quickly change the design as well as see how different materials and lighting options will look. There are now a variety of techniques and programmes available to render buildings with ever increasing realism.

Larger architectural practices are developing their own architectural visualisation tools in house so they can more accurately communicate how inhabitants might interact and the mood of a space. Hi-res 3D flythroughs have been commonly used by architects for many years to market properties, the development of proprietary tools, plugins or workflows to aid the creation of this polished 3D content could also be considered.

Further advances in virtual reality could see this visualisation process become more immersive, allowing architects and their clients to walk around and get a unique perspective on the designed space. Virtual reality has the potential to revolutionise how architects work. By virtually experiencing their designs, architects can identify potential issues and resolve them in the design stages. There is also a level of interactivity which allows you to try various materials and experiment with different solutions to issues. London 3D imaging company IVR NATION have created virtual reality houses that are 90% accurate and utilise the Oculus Rift headset.

The development of VR technologies is likely to be a hotbed for R&D for many years to come as companies look to improve the field of view and resolution as well as resolve issues with the devices themselves, architecture is set to be both one of the most significant driving forces behind this development as well one of the biggest beneficiaries.

Fabrication & Modelling

Another big area of R&D is in the development of various tools and methodologies that aim to streamline the transition from digital design to fabrication. Architects can now output their digital designs as models by using 3D printing, stereolithography laser-cutting and selective laser sintering (SLS). This allows them to experiment with accurate models of their designs and be much more aware of potential issues at prototype stage. Custom tools can also test concepts, examine energy use and even get a realistic idea of how their design will perform in a range of scenarios such as natural disasters.

3D Printing

3D printers are a key area in architectural research and development as they expand the possibilities of architectural modelling, allowing rapid prototyping so that you can evaluate and refine your design. 3D printing doesn’t have to stop at single buildings but whole complexes, streets and even cities.

City and Southwark skyline
London and Southwark By Wjfox2005 via Wikimedia Commons

3D Printing and Construction

3D printing is also being used in construction, either to support traditional construction or in self-constructing designs such as cheap 3D homes that can be built in situ. 3D printing is an attractive prospect as it is faster and creates less waste. A range of materials such as glass, concrete, acrylic, wax, ABS composites, metals and multi-material designs. Recycled materials can now sometimes be used within some 3D printing processes.

It is particularly exciting for architects as once impossible forms are now able to be created. If you experiment with different ways achieving the architecturally improbable with a variety of new materials or printing prototypes and test components to solve a design challenge then you may well qualify for R&D tax credits.

Understandably, there is a huge amount of risk-taking and research and development occurring as people explore the radical new possibilities opened up by 3D printing. There is a vast amount of experimentation as people look to scale-up and push what is achievable. In China, for example, WinSun Decoration Design Engineering Co. have 3D printed a five-storey apartment block, using a mix of glass fibre, steel, cement, hardening agents and recycled construction waste. Such projects demonstrate how relatively easy it is to create whole pre-fabricated buildings – the potential is there to solve the global housing crisis as well as provide disaster relief.

3D printed villa, video source CCTV

3D printing relies heavily on 3D modelling software and other specialised printing equipment to all work together to create the forms. There are new developments in 3D printing all the time like Carbon3D, that could have a huge impact on architectural design allowing for parts to grow rather than be printed layer by layer.

Read more on Rapid Prototyping, 3D printing and R&D.

Why aren’t more architect practices claiming for R&D?

Architectural practices aren’t claiming as much R&D tax relief as they could. There are many reasons for this but chief amongst them is that many architects are unaware that what they do constitutes R&D. As a consequence, firms are often missing out on tens of thousands of pounds worth of tax credits.

Traditionally many architectural practices have been structured as LLPs, which has precluded them from being able to secure R&D tax relief on activities which would have otherwise qualified, as the firms did not incur a corporation tax liability. A combination of changes applied to rates of taxation means that structuring an architectural practice as an LLP has for some become potentially less advantageous, meaning many architects that couldn’t previously claim R&D tax credits as LLPs are now able to qualify having changed their structures to become Limited Companies.

The innovative solutions that architects develop are all too often seen as simply getting the job done and not something that qualifies for Research and Development tax relief. There is also the mistaken notion that if it the solution isn’t ultimately successful, that the time spent on it does not qualify – this is not the case. Activities seeking to achieve an advance in science or technology can still be eligible for R&D tax credits, regardless of their ultimate success. Others believe that you need to have a dedicated research and development team in order to apply. This is definitely not the case. The test (from the BIS guidelines on the definition of R&D) is whether a competent professional in the field would have been able to resolve the challenges faced and reach the same conclusions without their competencies being overly stretched.

As some of the most innovative in the world, UK architects need to take full advantage of R&D Tax Credits in order to maintain their global position and continue to advance the technological baseline. The R&D tax credit scheme will not apply to every architectural practice but chances are if you invest in innovation then you will be able to claim.

Here at ForrestBrown, we are particularly good at spotting every R&D tax opportunity, including those hidden innovations that occur within ‘on the job’ problem-solving, and helping practices make the most of it. Find out today if your practice can qualify by speaking to one of our expert advisers. Get in touch with us by phone or email to discuss your situation with our dedicated R&D tax specialists.

Further Reading

Architect Magazine on Technical Developments in Architecture in 2018

ArchDaily on 3D Printing