R&D updates set out in Spring Statement
Words by GOLD newsdesk
Chancellor of the Exchequer Rishi Sunak’s 2022 Spring Statement for the UK was largely welcome news for the pharmaceutical industry, particularly around R&D.
The statement, issued 23rd March, confirmed that from April 2023, all cloud computing costs associated with R&D, including storage, will qualify for tax relief. The government will legislate to ensure that some R&D conducted overseas will also remain eligible for this where applicable, for example in the conducting of clinical trials.
To ensure that R&D relief is effectively targeted, the government is considering increasing generosity regarding R&D expenditure credit (RDEC) to boost investment in the UK, which would effectively make RDEC more competitive internationally.
Additionally, the Statement announced the development of a tax plan intended to cut and reform business taxes to incite a ‘culture of enterprise’ and mark the beginnings of conditions for growth, led by the private sector.
An additional commitment was made to examine the current tax system with regards to the apprenticeship levy, and whether the current system is doing enough to support flexible training models and ensuring apprenticeships remain a high-quality training route. Richard Torbett, Chief Executive, the Association of the British Pharmaceutical Industry, welcomed this commitment, saying: “Getting this right can support more people into careers in the life sciences sector. This is something ABPI members have been calling for and we look forward to working with the government to get this right.”
Also commenting on the Statement, Steve Bates OBE, Chief Executive of the BioIndustry Association, noted: “The sector welcomes the recognition of R&D tax relief taking place abroad for ‘regulatory and legal reasons’, and it was heartening to hear the Chancellor mention clinical trials as an example.
“The sector will also welcome the R&D tax credit scheme keeping a pace with innovation, with the Chancellor explaining how the scheme will now allow for claims for costs related to the storage of vital data and supporting data-heavy research such as genomic sequencing”.