The Association of the British Pharmaceutical Industry (ABPI) and The BioIndustry Association (BIA) have welcomed the continued support for life sciences in the 2012 Budget.
Chancellor of the Exchequer George Osborne revealed plans to reduce corporation tax to 24% next month – and then to 22% in 2014 – and introduce new tax measures to support R&D.
Mr Osborne also confirmed changes to the Controlled Foreign Companies (CFC) rules to make the UK a more attractive base and cut taxes on medicine patents.
Stephen Whitehead (pictured), Chief Executive of the ABPI, says the measures will allow UK pharmaceutical companies to “remain competitive in a global market”.
He added that the planned tax regimes were “welcome” and highlighted the importance of the industry to the UK. Currently, the UK pharma industry generates around £7bn in trade surplus and employs approximately 67,000 people.
Glyn Edwards, BIA Interim Chief Executive, said he was “pleased” that the Chancellor continues to support the life science sector in the budget.
He commented: “The Chancellor’s plans to help enable the commercialisation of research, invest £100 million in new university research facilities and to increase the Enterprise Management Incentive Scheme grant limit are to be welcomed.”
But despite the Government’s backing, Mr Edwards believes further proposals suggested by the BIA should have been included as part of this year’s Budget. “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,” he said. “These funds would make the Government an enabler rather than a provider of much-needed investment in innovative businesses.”
Other measures aimed at improving business opportunities include enhanced capital allowances for businesses establishing premises in new Scottish enterprise zones in Dundee, Irvine and Nigg, plus one in Wales at Deeside.
The Government will also provide £150m of tax increment financing to assist councils in promoting development, an extra £270m for the Growing Places fund, and consultation on simplifying the tax system for small firms with a turnover of up to £77,000.