Lobby group calls for more R&D support

A leading industry lobby group, TechUK has called on Government to do more to help financially and administratively with Research and Development. 

A TechUK report, Digital Economy Monitor, reports 76% of members have identified this as an industry priority - one fundamental to the future of their business. 

Currently R&D is the subject of a refocusing exercise by Government and HMRC.

What is the largest policy evaluation and redirection in decades has huge implications for the life sciences and biotech sectors.  

The Government’s stated aim is to make the UK a world leader in R&D. To that aim they have established new organisations such as, Office for Science and Technology Strategy, to drive R&D forward. The OSTS is to be funded to the tune of £38.9billion over the next three years. 

The industry is still presented with some pressing challenges. Limits will soon be placed on supports available to those companies who invest in R&D which is completed overseas for example, while changes to tax breaks domestically will also have an impact on the sector post Brexit. 

The Business Magazine spoke to James Tetley, partner and national head of innovation reliefs at leading audit, tax and consulting firm, RSM UK.  

Mr. Tetley highlighted changes to R&D tax relief schemes, such as the reintroduction of a PAYE cap, as an immediate challenge. 

Asked how the PAYE changes for R&D claims could impact life sciences and biotech businesses, Mr. Tetley said: “To prepare for this cap, companies must carefully consider how they structure and contract their R&D spend if they are to continue using the payable R&D tax credit under the current and proposed rules. For example, it may be worth SMEs considering whether the financial incentive of keeping the R&D in-house and investing in facilities outweighs the lower-risk model of outsourcing to subcontractors. 

“R&D tax relief has always been seen by the life sciences sector as a well-established and reliable tax incentive that encourages innovation.  

“Spin-outs and start-ups in the sector have relied on the relief since its introduction in 2000, and it provides valuable support to cash flow in the early years before commercialisation.  

“These changes could have a significant impact on the sector,” he concluded. 

James is contactable at [email protected]

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