What are Fiscal Incentives?
Fiscal Incentives are tax concessions aimed at supporting business and economic growth and encouraging investment in targeted markets and technologies such as those that promote good environmental practice and research & development activities. The three primary sources of direct tax relief for property and development expenditure in the UK are Land Remediation Relief and Capital Allowances for site preparation and build costs and Research & Development tax relief on the costs typically incurred by engineering and construction companies in delivering complex projects.
Capital Allowances provide an allowable deduction in calculating the taxable profits of a trade. They are available for a variety of different trades and activities but the three primary ones applicable to property owners, occupiers and developers are Plant & Machinery Allowances (PMA), Business Premises Renovation Allowances and Research & Development Allowances.
Incentives for Research & Development were introduced in 2000 for SMEs and extended to large companies in 2002. The current UK R&D tax reliefs, with their core in CTA2009 Part 13, are now amongst the most generous in the world and yet many companies still fail to claim, particularly in the engineering and construction sector.