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It is no secret that the UK’s relationship with the pharmaceutical sector is on shaky ground.
We have previously discussed the pharmaceutical exodus from the UK and the latest news to come from one of the biggest companies confirms that this is happening.
While concerned about the way the UK is being viewed by pharmaceutical companies, we want to take an optimistic look at how smaller innovative companies may benefit from these changes.
What is happening with the pharmaceutical sector in the UK?
The UK has been struggling to keep pace with investment in the pharmaceutical sector for many years.
This inability to keep money coming into the sector has been felt by the big companies that are failing to see the benefit of continued R&D work in the country.
The latest hallmark of this ongoing death spiral is the announcement by major pharmaceutical firm, GSK, that up to 350 R&D jobs will be axed from the UK.
While potentially not great news for those who may be at risk of losing their jobs, the retreat of GSK from the UK could be an opportunity for smaller companies to take the lead in discovering new advances.
How should innovative companies respond to changes in UK R&D?
If innovative companies want to fill the void that is being left by GSK, then it is wise for them to understand how to make the most of the UK R&D system.
Staff costs can be included in an R&D tax relief claim, which means that any former GSK researchers who can be picked up by other companies can have their wages factored into the calculation.
Similarly, there is a good chance that some of the staff made redundant will qualify as competent professionals and their time with GSK will help to strengthen their presence in the eyes of HMRC.
Rather than seeing the withdrawal of some large pharmaceutical firms as the harbinger of a decline in the UK’s power in the sector, the current situation could be seen as an opportunity.
The UK cemented itself as a powerhouse of pharmaceutical innovation during the COVID pandemic and it would be a shame to let that legacy go to waste.
As such, accountants and R&D tax consultants should be working to support innovative businesses attempting to take bold new strides in the sector.
To continue supporting the pharmaceutical sector with confidence, speak to our team today.
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