WHY THE UK ROCKS FOR RESEARCH
During a January visit to San Francisco to coincide with the JP Morgan conference, it was encouraging to hear from one US biotech company CFO how he considered the UK an attractive place to base his company’s research activities – above and beyond any other.
Among the reasons why this CFO had chosen to place his company’s research activities in the UK was the attractive tax system for R&D Tax Credits, whereby a UK SME can receive 33% cash back on research activities it carries out as a UK tax-resident company, even if it is conducting that research outside the UK. There is no requirement to spend the money in the UK and therefore the UK system ranks ahead of many.
Once a company has profits, the Patent Box also offers a tax benefit via a 10% corporation tax rate, and no withholding tax on dividends.
And it’s not just fiscal temptations that are catching the eye of enlightened American CFOs, it is the UK’s talent – a pool of highly motivated scientists who inhabit a ‘less-fished pond’. The biotech industry has been buoyant in the UK long enough for a plethora of talent to have grown up with it, which is now fair game for UK and overseas companies alike to dip into.
Encouraged by VC investor confidence and a Government strategy designed to attract global business investment, drug development and IP-rich companies have grown up in all corners of the country. Larger funding rounds, bigger workforces and a researcher demographic that is becoming younger all provide a rich environment from which innovation and top-quality research springs in abundance.
The US-UK ‘special relationship’ works in the other direction too – it became apparent that UK-based biotech companies are on the lookout for US talent too. We spoke to several UK companies, looking to list on NASDAQ, who were seeking out US CFOs to aid their connection to the US investment community and counteract the ‘veal factory’ effect whereby great ideas generated in the UK are exported to the US and grown in that market.
All in all, a sharing of talent across the Atlantic could blossom into a very special relationship set to benefit both sides. It remains for us in the UK to ensure we aren’t too modest, in true British style, and that we shout about assets and benefits offered by the UK and ensure that potential colleagues within US biotechnology hubs are fully aware of the land of opportunity that awaits across the water.
With or without Brexit the UK is definitely open for global biotech business.
For more information on R&D tax credits visit http://www.confluencetax.com/rd-tax-credits/
If you would like to find out more about company structures and tax efficiencies for US companies looking to conduct R&D in the UK, contact Colin Hailey on firstname.lastname@example.org or +44(0)7855 502917.