Chancellor gives boost to medical innovation and life sciences industry in Spring Budget
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.
🔴📊 We welcome the Chancellor's @Jeremy_Hunt announcement of a new enhanced R&D tax relief rate for the UK’s most innovative businesses in #SpringBudget today 👏— BioIndustry Association (BIA) (@BIA_UK) March 15, 2023
Read our full press release ⤵️https://t.co/h7mJKcKC2s#lifesciences #biotech pic.twitter.com/ckKSfaZOMe
Companies that will benefit from the new rate include:
- Infex Therapeutics, a biotech company in the North West developing medicines to treat infectious diseases and tackle the threat of anti-microbial resistance (AMR)
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."
- VasoDynamics, a biotech company in Stevenage developing medicines to address the side effects associated with cancer therapies
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.”
- RQ Biotechnology, developing antibody-based treatments to protect immunocompromised people against COVID-19 and other future pandemic threats.
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:
- Steve Bates and a range of CEOs of companies based across the UK are available for comment and interview. Please contact Martin [email protected] to be connected.
- Government figures show there are over 6,548 businesses in the UK life sciences industry, and approximately 70-80% are SMEs. These businesses employ over 282,000 people and generated £94.2 billion turnover in 2021. The number of businesses and the number of sites operated by these businesses have both seen an upward trend since 2009, with 23% more businesses and 32% more sites operating across the UK in 2021 compared to 2009 (Gov.uk)
- Medical innovation is driven by smaller companies, which represent 65% of the global drug development pipeline with an additional 7% being developed by them in partnership with larger firms (IQVIA)
- The UK accounts for 35% of all life science start-ups created in Europe since 2012 (McKinsey)