UK property sector leads the way in R&D thanks to PropTech innovation

January 9, 2020 / Isla MacFarlane
UK property sector leads the way in R&D thanks to PropTech innovation

When it comes to tech innovation, it’s fair to say that the property world has a bit of catching up to do, so it perhaps isn’t surprising that the sector is storming ahead with Research and Development (R&D).

The latest research by R&D tax credit specialist, RIFT Research and Development Ltd, has found that the UK property sector is leading the way when it comes to the largest sums awarded in R&D tax relief as a percentage of expenditure.

RIFT analysed the latest government data showing the amount awarded in R&D tax credits by sector and what this equated to as a percentage of total expenditure for work qualifying for the scheme.

The data shows that across all sectors, the R&D tax relief awarded equates to 14% of the total sum of expenditure but the UK property sector ranks top of all individual sectors, with tax relief paid out by the government equating to 33% of the total R&D expenditure of the sector.

The property sector has also seen the largest increase in this percentage year on year, up 4.8% annually.

This is a far greater increase than any other sector and comes as no surprise as the UK property sector has seen a drastic change in just a few short years, as the emerging prop tech sector reprogramming every aspect of how property is built, bought and sold.

Director of RIFT Research and Development Limited, Sarah Collins said: “The latest data demonstrates that when it comes to the sector making the most of R&D tax relief, the property sector really is leading the way both where the total sum awarded is concerned, and the year on year increase.

“This comes as no surprise with the explosion of the PropTech sector radically changing the way we operate within the property space whether it be as a consumer or as a working professional.

“As a result, there has been some huge advancements in recent years with a vast number of companies pioneering change across the board from the way we apply for a mortgage, to the way we list and sell our homes, even within additional services such as moving home, all of which have qualified for R&D tax relief.”

Sector rankings of R&D Tax Credit claimed as % of total sector expenditure
Industry sector Amount claimed as % of expenditure (2017-18)
Real Estate 33%
Accommodation & Food 20%
Other services activities 19%
Health & Social Work 19%
Information & Communication 18%
Admin & Support Services 17%
Wholesale & Retail Trade, Repairs 16%
Construction 16%
Professional, Scientific & Technical 15%
Agriculture, Forestry, Fishing 14%
Water, Sewerage and Waste, 12%
Arts, Entertainment & Recreation 12%
Transport & Storage 12%
Manufacturing 12%
Electricity, Gas, Steam and Air Conditioning 12%
Education 12%
Financial & Insurance 11%
Mining & Quarrying 9%
Public Administration, Defence & Social Services x
   
Total – all sectors 14%
   
Annual Increase in R&D Tax Credit claimed as % of total sector expenditure
Industry sector Annual change (%)
Real Estate 4.8%
Health & Social Work 1.1%
Education 1.1%
Construction 0.7%
Professional, Scientific & Technical 0.6%
Financial & Insurance 0.6%
Information & Communication 0.4%
Manufacturing 0.3%
Admin & Support Services 0.3%
Wholesale & Retail Trade, Repairs 0.2%
Mining & Quarrying 0.2%
Water, Sewerage and Waste, -0.4%
Transport & Storage -0.8%
Arts, Entertainment & Recreation -1.0%
Electricity, Gas, Steam and Air Conditioning -3.2%
Other services activities -3.5%
Agriculture, Forestry, Fishing -4.1%
Accommodation & Food -5.0%
Public Administration, Defence & Social Services x
   
Total – all sectors 0.4%

 

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