UK capital gains tax change "a fatal blow"

Commenting on the UK government's recently-published pre-budget report, the BioIndustry Association has said that the abolition of capital gains tax taper relief and introduction of a new 18% tax rate "could deliver a fatal blow to the UK's bioscience industry." Aisling Burnand, the BIA's chief executive, said: "the BIA is dismayed and shocked by the decision..." She added: "we strongly believe that investments in innovative [small and medium-sized enterprises] should not be treated with this heavy-handed approach. This decision needs to be reversed as a matter of urgency to prevent an immediate exit of funds from the sector. March 2008 will be too late."

Explaining the biotechnology industry's cause for concern, Ms Burnard said: "it takes up to 12 years to bring a new medicine from bench to market, so long-term investment is vital for the survival of this sector and its ability to deliver new medicines for patients. Taper relief encourages longer-term investing - without this incentive, investment in UK bioscience companies could be severely hampered."

The BIA considers the most recent government announcement as "totally counter-productive" considering its support for initiatives such as the R&D tax credit, the Cooksey Review on health research funding and the Sainsbury Review on science and innovation. "An urgent rethink is needed," Ms Burnard concluded.