The UK government’s proposed changes to the research and development (R&D) tax relief system could have a significant impact on the life science community.
The UK has an exceptional science base, and global access to capital and talent to fuel the growth of life sciences companies domestically. The life science industry in the UK generated £94.2 billion in 2021.
However, life science SMEs depend on R&D tax relief to drive innovation through the risky early stages. Without it, less R&D will be done in the UK and progress will slow. The affected companies are mobile and can easily relocate to other countries if there are better incentives elsewhere.
The UK must act now to boost growth in scientific R&D, not reduce it.
LifeArc recommends deferring the cut to SME R&D tax relief, to seek better alternatives. This would protect the current level of life science SME investment, enable companies to continue on their planned R&D pathways to achieve key milestones and raise additional capital, as well as encourage companies to stay in the UK.
LifeArc supports the BioIndustry Association’s (BIA) proposal to explore solutions that minimise fraud in the system without damaging legitimate life science SME investment: for example through eligibility criteria, declaring when claims are being made using advisers with contingent fees, and more.
Find out more: LifeArc representation – Spring Budget 2023