15 March, London - The UK’s Chancellor, Jeremy Hunt, has announced a new enhanced R&D tax relief rate for the UK’s most innovative businesses in his Spring Budget today. The UK’s trade association for innovative life sciences and biotech, the UK BioIndustry Association (BIA), has warmly welcomed the announcement.
Steve Bates OBE, CEO of BIA, said: “This is a huge boost for biotech companies across the UK developing new medicines and improving healthcare for patients. Our research-intensive industry is a key growth area for Britain’s economy. The Chancellor is rightly focusing UK taxpayer support to enable life science entrepreneurs to crowd in more private investment, help keep the UK at the cutting-edge of international science, and create new high-value jobs across the UK.”
The new R&D-intensive company category is a highly effective way to incentivise truly innovative businesses taking significant financial risk by investing heavily in R&D. It will target UK taxpayer support to enable life science entrepreneurs to crowd in further private investment allowing them to grow and accelerate innovation in the UK.
Small and medium-sized enterprises (SMEs) that are investing over 40% of their total operating costs in R&D and not yet making a profit will receive a cash payment of 27p for each £1 they have invested in R&D. All other loss-making SMEs will receive a new lower relief rate of approximately 18p, which was announced at the Chancellor’s Autumn Statement in November 2022.
Companies that will benefit from the new rate include:
Dr Peter Jackson, CEO of Infex Therapeutics said: “Today’s announcement is welcome news for Infex and UK life sciences, which is a key pillar of the UK growth economy. The new R&D tax credit system will give us the financial flexibility to continue to advance our pipeline of innovative treatments for life-threatening infections. This is particularly important as the world faces a growing threat of infectious diseases and drug-resistant infections, which is placing a significant burden on global healthcare systems. There is an urgent need for new anti-infectives, and we will continue to support the UK's leading role in driving innovation in this area."
Fiona Li, Founder and CEO of VasoDynamics said: “We have an exciting pipeline of drugs in clinical trials in the UK for the prevention and reduction of cancer therapy-induced mouth ulcers, skin damage and hair loss, which will improve many cancer patients’ quality of life in the UK and elsewhere. Government support for drug research and development is vitally important. We are delighted and very much encouraged by the new scheme, which further stimulates our R&D activities and strengthens our ability to contribute to UK local industry and society as we enter into the next phase of clinical and commercial development.” - Fiona Li, Founder and CEO of VasoDynamics
Hugo Fry, CEO of RQ Biotechnology said: “As a small but ambitious London-based antibody discovery company, we’re really pleased to hear the Chancellor’s announcement today of a special higher research and development tax relief rate. This will help us to go full steam ahead in our commitment to discover and develop infectious disease medicines for vulnerable patients. This announcement will really allow us to grow quickly, to build our portfolio, employ local talent and to continue our strong investment in the UK’s biotechnology sector.”
BIA has worked closely with the Chancellor’s team since that time to develop support for a higher rate for companies that are investing heavily in R&D to build the innovative industries of the future, such as life sciences and biotech. This collaborative work will continue as the Treasury develops a new R&D tax relief scheme, a public consultation on which recently closed.
Steve Bates OBE, CEO of BIA, said: “The new scheme being developed is a great opportunity for the UK to fine-tune and enhance what is already recognised globally as a key mechanism for incentivising SME investment in R&D and innovation. Going forward we need to ensure the UK’s support for highly innovative companies is globally competitive, eliminates fraud and targets taxpayers’ money into truly innovative businesses that are creating jobs and driving economic growth”
Notes to editors: