Budget case fromTreasuryThe Chancellor of the Exchequer, George Osborne, today set out the 2014 Budget – a “budget for a resilient economy”. In an announcement that saw significant changes to pensions, ISAs and an economic growth forecast revised up to 2.7% for 2014, there was also much for the life science sector to cheer. Confirming his commitment to science, the Chancellor stated that “If Britain isn’t leading the world in science and technology and engineering, then we are condemning our country to fall behind”.

£55 million to establish a large scale cell therapy manufacturing centre
As the BIA called for in our Budget submission and as recommended in the House of Lords Science and Technology Committee’s report into regenerative medicines, the government has committed £55 million to establishing a new UK Cell Therapy Manufacturing Centre. The Centre, expected to open in 2016/17, will be run by the Cell Therapy Catapult and will provide vital large-scale manufacturing facilities, helping the country to retain manufacturing activity, attract inward investment and boost exports.

Increase in the R&D Tax Credit for loss making SMEs from 11% to 14.5%
From April 2014, the Government will increase the rate of the payable credit to loss-making SMEs under the SME R&D tax credit scheme, from 11% to 14.5%. SME R&D tax relief allows companies to reduce their profits liable to corporation tax by 225% of qualifying R&D costs, so this change will result in eligible companies being able to convert larger sums of taxable losses into payable cash credit. R&D tax credits are vital to BIA members and form the bedrock of the government’s support to the sector. This policy continues year-on-year positive change actively called for by the BIA.

The Seed Enterprise Investment Scheme has been made permanent
The government committed to make permanent the Seed Enterprise Investment Scheme (SEIS), which has been beneficial for many BIA member organisations. The associated capital gains tax reinvestment relief will also remain a permanent feature of SEIS.

The annual investment allowance for companies has been doubled to £500,000
Annual investment allowance (AIA) will be doubled until the end of 2015, which means that 99.8% of businesses will receive 100% up-front relief on qualifying investments in plant and machinery.

EIS and VCTs consultation
The Chancellor made several references to ensuring that schemes such as Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCTs) are used appropriately. To better target high-risk investment, government will change the eligibility criteria of venture capital schemes to avoid subsidising low-risk activities that already benefit from certain government programmes. Stakeholders will be consulted over summer 2014.
Government will also set a rate of 30% income tax relief for the Social Investment Tax Relief, in line with EIS and VCT.
In addition, the list of qualifying investments for ISAs will be extended to include peer-to-peer loans and the government said they will explore extending the list further to include debt securities offered via crowdfunding platforms. This in interesting as it ties in to the BIA’s call for Citizens’ Innovation Funds (CIFs), which would democratise investment and allow a greater pool of investors (not limited to those who can accredit themselves for EIS / SEIS) to support high-growth companies. The fact the government is considering eligibility of peer-to-peer crowdfunding for ISAs is a sign that they are getting serious about trusting savers. Indeed, Osborne, in relation to pensions, said he didn’t agree with the patronising view that people can’t be trusted with their money.

The Chancellor said that this Budget was for makers, doers and savers. A number of these initiatives should sit well with those in the bioscience community.