More than 750 life sciences companies call Scotland home, with the industry employing over 37,000 people and turning over in excess of £5.2 billion in 2016 (a figure which is predicted to rise to £8 billion by 2025). Scotland has been, and continues to be, responsible for some of the greatest innovations in the life sciences industry. The sector is an ecosystem strengthened by continued investment in innovation and continues to blossom into a leading light in the worldwide Life Sciences community.
The country has attracted significant investment and at the start of 2019 it was revealed that companies in the industry had raised £85 million in equity investment in the past year. This includes investments from companies including Johnson Matthey, GSK, ThermoFisher Scientific and Quotient. In order to maintain such levels of investment, it is extremely important to ensure that businesses are encouraged to continue to innovate, and are rewarded for doing so.
The necessity of investment in innovation has been tangibly demonstrated since the introduction of the R&D tax credit scheme in 2000 for SMEs and in 2002 for large companies. The scheme aims to fuel growth by encouraging innovation and rewarding companies for undertaking research and development work. Businesses which undertake research in the life sciences area, from pharmaceuticals to biotechnology to the development of medical devices, could be eligible for financial rewards under the R&D tax credit scheme.
Companies can secure tax benefits in the form of a payable cash credit, a tax rebate, or a deduction that can be used to offset future profits, with loss making companies also eligible for a cash credit. It is also important to note, that even if a research project failed, it is still eligible for the scheme, meaning that businesses can recoup some of the costs that went in to it.
Alison McLintock, Consulting Manager at global innovation funding specialists Leyton UK commented that “successful Life Sciences companies are those “willing to take a risk”. She also added that “they’re willing to invest in R&D and are willing to look for new areas to move into, to look for new applications for their existing technologies and collaborate with others to come up with something that’s really new.”
McLintock went on to comment on the breadth and range of activities which can qualify for the R&D Tax Scheme. “Innovation doesn’t just take place in a laboratory with scientists wearing white coats,” insists McLintock. “We have a wide range of clients, from software companies developing the programs that are needed to underpin precision medicine through to engineering firms that are creating the next generation of medical devices.
“One of the most rewarding parts of my job is hearing what my clients have spent the money on that we’ve been able to reclaim for them from their tax bill. For some of them, the cash has meant that they’ve not had to lay off staff and have been able to keep their doors open. For others, it’s given them the money that they’ve needed to fuel their growth. They’ve spent the money on hiring new staff, or buying new equipment, or expanding their premises.”
“Sources of innovation funding like R&D tax relief and the patent box scheme are often overlooked even in the most innovative sectors. That’s why we’re working hard to make it as easy as possible for our clients to access these funding sources and create a continuous cycle of innovation in Scotland’s cutting-edge businesses”.
Leyton are a global innovation funding consultancy who specialise in partnering with businesses to identify which government funding schemes are more relevant to them. Our goal is to help companies take advantage of existing tools to boost their ability to stay ahead in a globally competitive market. Our consulting team includes highly qualified tax professionals, scientists, engineers and software specialists. They have expertise across almost all industry sectors and an in depth understanding of the legislation surrounding the scheme. This breadth of knowledge allows us to work seamlessly in all sectors, with an understanding of the specific challenges which are unique to each of them. We will work with you to maximise the value of your claim by identifying all of the relevant qualifying activities and expenditure that can be included under your claim. Our technical specialists will prepare a supporting technical report in justification of the claim, and offer a full and free defence in the unlikely event of any enquiry from HMRC.
By Dr Alison McLintock, Consultant Manager, Leyton
Hear more from Leyton at The Scotsman annual Life Sciences Conference on the 26th of November. Book your place here: www.scotsmanlifesciences.co.uk