UK R&D tax relief extended to majors

In his Budget speech on March 7, UK Chancellor of the Exchequer GordonBrown said he will "issue proposals and will consult on the best way to extend an R&D tax credit to larger companies," as was granted to smaller firms last year. He added that "we will legislate a new and special tax credit that will help British companies contribute to the relief of disease around the world, an incentive to accelerate research on diseases - such as AIDS, tuberculosis and malaria - that each year kill eight million people."

As a result, it is expected that those companies which have qualifying R&D expenditure on specified diseases will gain an extra 50% tax relief. John Whiting of PricewaterhouseCoopers says while such moves are certainly welcome, they may be too late to stop a flow of R&D out of the UK. The move was also welcomed by the Association of the British Pharmaceutical Industry, whose director general, Trevor Jones, says it will encourage the heavily research-based UK drug industry, which spends some