Life sciences to benefit from new UK budget plans
pharmafile | March 21, 2012 | News story | Sales and Marketing | ABPI, BIA, Budget, life sciences, tax
The UK life sciences industry will benefit from a cut in corporation tax and additional funding for academic research.
The 2012 budget marked the industry out as a key growth driver for the UK economy, and is looking to make research and innovation easier in the country.
To this end, the chancellor George Osborne said the government would invest £100 million in new university research facilities, whilst increasing the Enterprise Management Incentive Scheme grant, which gives tax incentives to smaller firms.
Osborne also said he would be cutting the corporation tax by one per cent to 24% next month, and plans to lower it further to 22% by 2014.
An above-the-line R&D tax credit will also be introduced next year, he said, to help all research-based firms in the UK.
The ABPI welcomed today’s budget – its chief executive Stephen Whitehead said: “The measures announced in the budget statement will help improve the UK’s general business environment and allow pharmaceutical companies operating here to remain competitive in a global market.
“Specifically, moves towards a more competitive tax regime, including a further reduction of corporation tax so that the UK has among the lowest rates in Europe, are welcome.
“Looking beyond the budget, it is essential that recognition is given to the importance of a strong commercial environment for industry, where the uptake of new innovative medicines is ensured and pricing rewards innovation.”
The BioIndustry Association also welcomed the additional funding and grants, but said the government could still do more to help smaller biotech firms.
Glyn Edwards, BIA interim chief executive, said: “We are pleased that the chancellor recommitted the government to supporting the life sciences sector in the budget.
“However, the BIA believes that this commercialisation will be helped if innovative companies have access to additional sources of funding, such as that offered by our proposed Citizens Innovation Funds.”
The BIA believes these funds could address the so-called ‘valley of death’, a funding gap that hinders companies’ efforts to commercialise their ideas.
Under the BIA’s proposal, the CIFs would be a tax-free retail investment, allowing individuals to invest up to £15,000 a year in funds targeted at small and medium-sized enterprises.
Edwards said that these funds would make the government an enabler rather than a provider of the ‘much needed investment’ in innovative businesses.
The BIA had submitted this idea to the chancellor ahead of today’s budget, but it seems that it did not find its way into the government’s plans.
Ben Adams
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