Despite uncertainty in global financial markets and around the impact of Brexit on R&D funding, workforce and medicines regulation, the UK’s Life Sciences sector has continued to grow and attract investors. The UK is already a global leader in the development and manufacture of Pharmaceuticals and in research and innovation for Life Sciences, in diverse fields such as biotechnology, agri-tech, animal and veterinary sciences, medicine, medical diagnostics and medical devices.
STRATEGIC IMPORTANCE
Health expenditure represents an ever-increasing proportion of government budgets and the Life Sciences Industry is one of four key sectors targeted by the UK government’s new ‘Industrial Strategy’. This reinforces the critical strategic importance of Life Sciences to economic growth. The sector provides high skilled and highly productive jobs and is a major contributor to employment, taxes and GDP.
The reliance on pharmaceutical drugs in the Western world is unlikely to abate. The proportion of older people in our society is increasing and consequently, innovative new treatments and medical technologies are needed to effectively meet the needs of an aging population. Therefore, from an investor point-of-view, investing in health-related companies is a solid investment strategy.
COLLABORATION IS KEY
Unlike other industry sectors where there is normally a stark division between academia and business, in Life Sciences, the line is blurred, with numerous new drugs and treatments coming out of universities. The UK is a great place for life sciences research with four of the world’s top ten universities, cutting-edge facilities, world-leading academic researchers and strong collaborations across disciplines and organisations. It is likely that, in the future, we will see even more collaboration between universities, businesses and the NHS making it easier to translate scientific discoveries and breakthrough innovative technology into development of new treatments and products. An integrated system, and access to patient data for clinical trial recruitment and observational studies, is crucial to support biomedical research necessary to understand the causes of intractable diseases like cancer and dementia.
GOVERNMENT SUPPORT
The Industrial Strategy, published on 27th November 2017, focusses on “five foundations of productivity”: ideas, people, infrastructure, business environment, and places, to boost productivity and earning power across the country. For the Life Sciences sector, this will include investing in research and early stage development, continuing to develop and recruit the best scientists, clinicians and entrepreneurs, turning ideas into the products and services on which the industries of the future will be built, removing some of the current regulatory barriers and opening-up the NHS to new innovations and new clinical trials. The UK Government will take a lead in this, working closely with industry to ensure that the UK is a world-class centre for discovery, development, manufacture and adoption of Life Science innovations, and maximises the rewards and benefits this innovation can bring to everyone in the UK.
R&D TAX RELIEF
For most life science companies, tax relief is never going to replace the huge amount of funding necessary for their projects. However, given the nature of the sector, it is a good way to get some additional money, and once businesses realise that claiming need not be time-consuming and complex, it becomes a ‘no brainer’.
Even though life sciences companies have already been extremely successful with tax relief claims to HMRC, the sector is still failing to secure a potential financial windfall from the millions that go unclaimed each year. While this can be put down, in part, to a lack of claims from those carrying out R&D in less obviously eligible sectors, this cannot be said for the life science sector, where the eligibility of projects is rarely in doubt.
However, life science companies are not necessarily receiving the tax relief that they are due. Many biotechnology companies and CROs doubt their eligibility because of the circumstances of their projects, whilst others submit unsuccessful claims as a result of misunderstanding the guidelines. Unlike other sectors, claiming for the biotechnology sector is not so much about the identification of eligibility, but about understanding the regulations.
That’s why it’s always wise to seek professional advice before undertaking a claim. Involving specialist advisers, such as Jumpstart, also helps you to submit your claim in the most efficient way possible, since you’ll benefit from the streamlined processes and years of experience they’ve built up submitting thousands of R&D tax credit claims successfully.
With support from the right specialist advisers, you’ll be able to:
- demonstrate which of your activities qualify under the scheme
- open up a new revenue stream to fund further R&D projects, and
- learn how to make the best use of the scheme going forward.
For a free R&D tax credit consultation and analysis of the potential returns you might expect, contact the Jumpstart team on 0131 240 2900 or helpinghand@jumpstartuk.co.uk
