Medtech and biopharma can drive the UK growth agenda and more support should be given
The UK’s biopharma and med-tech sector is a world class sector with potential for stellar growth, according to Luke Hamm, CEO of GovGrant, which helps companies in the sector obtain commercialise their innovations, including R&D tax credits.
Commenting after the publication of the government’s Office For Life Science’s (OLS) statistical survey of biotech and med tech in the UK, Luke said: “The report underlines the vital importance of this sector to the UK economy, with a quarter of a million employees, turnover of nearly £75bn and over 6,000 businesses across the four key areas.” [biopharma, biopharma service and supply, med tech core and med tech supplier businesses.]
He added: “I urge these business to fully take up the opportunity to benefit from the tax system and incentives from government. R&D tax relief is the most generous corporation tax relief currently available to business in the UK, especially for SMEs.”
He explained that they can recover up to a third of their qualifying R&D expenditure. For every £1 of qualifying expenditure a business could potentially get back 33p, which can be ploughed back into further innovation.
“These business invest £millions in developing the treatments of the future, but professional scientific and technical claims made up only 19% of the total number of R&D claims, according to the latest figures from HMRC.”
Luke noted that in med tech alone there are over 2,700 companies, and around 700 in biopharma. These sectors focus on the discovery, development and marketing of new therapies and medical devices.
“It is not certain how many businesses are routinely claiming R&D credits from HMRC, but overall, we know that most underclaim and some are not even aware of the scheme. If we apply that to the biopharma/medtech sector it may be that nearly 3,000 high tech, investment-heavy companies are failing to receive generous allowances for their work.”
Biopharma and med tech are critical to the future economic success of the UK. I urge the government, through its Industrial Strategy sector deal for life sciences to be more explicit about the opportunities for R&D.”
In the sector deal, the government commits ‘to increase public and private R&D spend, reaching 2.4% of GDP by 2027.’ Luke said: “For a critical sector like life sciences, this is not good enough. South Korea is currently spending over 4.0% of its GDP on R&D. We must make a firmer commitment to supporting the industry via the tax system. I hope ministers will take note of the OLS survey and re-cut their tax incentive plans as a result.”