Tax Relief for Life Sciences

Funding for Life Sciences Businesses

Dating back to the 18th century, the UK has been a trailblazer for life sciences, responsible for many groundbreaking discoveries. The sector utilises the best of British innovation to confront the biggest healthcare challenges of our time – ageing populations, soaring research and development (R&D) costs, lifestyle diseases, worldwide pandemics, and antimicrobial resistance. 

The field of life sciences is vast, covering everything from pharmaceuticals, biotech, and medtech to medical device manufacturing, botanical science, crop technologies, and healthcare technologies. 

The COVID-19 pandemic highlighted how the UK’s pioneering and innovative solutions within life sciences are leading the way, spearheaded by technological advancements. Having produced the world’s first COVID-19 vaccine, the government is committed to supporting the life sciences sector as part of its strategy to grow the UK economy – the £650 million “Life Sci for Growth” package, which includes up to £48 million to fund scientific innovation to prepare for future health emergencies, is testament to this. 

According to the Office for Life Sciences 2021 statistics, the sector within the life sciences industry with the highest proportion of sites and employment was the medical technology core sector accounting for 44% of sites and 40% of employment. From medical device engineers to manufacturers of plastic injection moulding, many of these businesses may be eligible for tax relief or grant funding for the work they do. 

R&D in Life Sciences

R&D within the life sciences industry is part and parcel. This includes using digital technology to make a technological or scientific advancement in the field, such as pioneering vaccines and treatments or undergoing clinical trials and research using artificial intelligence.  

R&D tax credits are a welcome financial boost for life sciences innovation, providing companies with a cash injection or corporation tax deduction for qualifying R&D projects. This tax incentive is a valuable source of funding for businesses, assisting with future business growth and enabling innovation funding. The good news is that even if projects aren’t successful, an attempt to seek an advance in the industry qualifies as R&D, and in the world of science and technology, or medical technology, there is an abundance of trial and error involved. 

Projects that may qualify for R&D tax relief include: 

  • Developing or improving experimental tests/protocols and disease models

  • Running clinical trials and other testing to adhere to regulations

  • Innovation involved in improving existing products; for example, extending shelf life or making packaging safer

  • Creating and utilising technology, such as robotics or automation, to improve manufacturing processes or create new ones

  • Software development

  • New methods of manufacturing and engineering medical devices to improve outcomes

  • Designing of plastic/injection moulding components

  • Advances in diagnostics using technology

  • Biotechnology – Using new materials or technology in medical equipment

  • Developing new or improved medical devices, compounds, or medicines

  • Biological screening and pharmacological testing

    The advent of big data analytics, digital health, and other technological advances presents an overwhelming opportunity for UK businesses within life sciences to remain at the forefront of innovation globally. 

    How Can You Fund R&D in Life Sciences?

    There are various forms of innovation funding available to enable life sciences R&D to take place, including grant funding and tax relief. 

    Grants, usually nonrepayable, are awarded by funding bodies prior to any innovation taking place, whilst tax relief is a retrospective incentive claimable after the accounting period in which the R&D took place.  

    Grants-Icon copy

    Grant Funding

    Any business that’s investing time and resources into innovative R&D in the UK can apply for and access UK/EU grant funding. There are various funding bodies, such as Innovate UK and the European Innovation Council, which provide funding competitions for businesses to access funding to innovate and grow.
    PB-icon copy

    The Patent Box

    The Patent Box is a government tax relief scheme that rewards companies for investing in innovation. If a company is making a profit on patented inventions, it’s eligible for a lower effective corporation tax rate of 10% on relevant profits. What’s more, if a company is eligible for the Patent Box tax relief regime, it’s likely that it’s also eligible for R&D tax relief.
    RD-Icon copy

    R&D Tax Relief

    HM Revenue and Customs’ (HMRC’s) R&D tax relief scheme rewards businesses that are seeking an advance within their industry. R&D tax credits can be claimed by businesses that are developing new systems, products, or processes or modifying existing ones, which in turn create a scientific or technological advancement.

    Ryan’s Life Sciences Specialist

    Megan Young, Consultant, R&D Technical  

    Megan holds a Bachelor of Science degree in molecular biology and has a strong pharmaceutical background. Her knowledge and experience are invaluable in uncovering R&D for businesses within the science and medical sectors. 

    Megan’s work history includes working as a medical information specialist for a pharmaceutical company. She also has a Level 5 Certificate in Leadership and Management and is currently studying for her ATT/CTA Tax Pathway. 

    Your Innovation Funding Partner

    Ryan’s tax managers and sector specialists offer expert industry insight and support life sciences businesses like yours to navigate the unparalleled technological advances within the industry and access HMRC tax relief and grants to fund revolutionary innovation and business growth.

    Get the latest Thought Leadership:

    Subscribe to stay informed of important tax issues and trends that impact your business.

    SUBSCRIBE

    Connect with an Expert

    To harness the full potential of your life sciences innovation, please fill in the form below, and one of our specialists will be in touch.

    get in touch