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New year, new R&D tax relief regime | |
At the end of 2023, the government published draft legislation with details of the new regime for R&D tax relief, “the merged scheme” which will replace the existing SME and R&D Expenditure Credit (“RDEC”) schemes for accounting periods commencing on or after 1 April 2024.
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It also introduces various other proposed changes, some of them previously announced earlier in the year and some in the Autumn Statement. The key changes are summarised below: - Merged Scheme Introduction: New "Merged Scheme" replaces existing SME and RDEC schemes for accounting periods beginning on or after 1 April 1, 2024. The new scheme is modelled on the current RDEC scheme
- Confirmation of rules for loss making R&D intensive SMEs: Relief calculation will be based on qualifying cost uplifted by 86% and then surrendered at 14.5%
- Subcontractor complexities and changes: R&D work subcontracted to companies will no longer be eligible for tax relief, with some exceptions
- International considerations: With limited exceptions, relief restricted for non-UK outsourced R&D activities
Our latest article provides more detail on the announced draft legislation. Please click below to find out more. | |
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The beginning of January and the heralding of a New Year brings with it the increasingly important J P Morgan Healthcare conference in San Francisco. With the main conference invitation only, it has spawned a series of satellite events for the industry. The event is a bellwether for the fortunes of the wider life science industry for the next year so what did 2024 herald? | | | |
Generally the mood was reported to be cautiously optimistic in contrast to the pessimism of 2023. The conference saw significant announcements of acquisition deals by big Pharma – J&J; Novartis; MSD and GSK all capturing headlines with deals of respectively $2bn; $680m; $425m and $1.4bn. These followed closely on the December announcements of acquisitions by BMS and AstraZeneca. What do these mean for the wider industry? These deals were all for later stage assets - so all of these companies were buying into more certainty of outcome. Following a period of few deals, these acquisitions may well represent the start of a new wave throughout the industry. However, with a focus on later stage its likely that for the moment the more risky early stage deals will continue to be difficult to get away – at least at a sensible premium. | |
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Independent Review of University Spin-Outs | |
As long term advisers to spin out companies we very much welcomed the initiative that gave rise to the Independent Review on University Spin-Outs.
This review, reporting on the current status of spin-out activity in the UK noted the success of spinout activity in the UK with investment in spinouts increase from £1.06Bn in 2014 to £5.3Bn in 2022 – second only to the US in terms of total investment in spinouts. | | | |
The review noted that in the UK it was not only science and technology that was generating spinouts but that humanities, social sciences and the arts were also beginning to capitalise on tech transfer opportunities; thereby providing opportunities for the UK to become very successful in generating significant value from spinouts. | |
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James Cowper Kreston is a leading firm of accountants and business advisers, with offices across the South of England. We deliver focused, innovative advice to a diverse range of businesses and individuals helping our clients to maximise their potential. If you would like to discuss any of the topics raised within this newsletter please email us on info@jamescowperkreston.co.uk or call us on 01635 35255. James Cowper Kreston | |
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The information in this newsletter must not be relied on as giving sufficient advice in any specific case.
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