Clinical Research, Labs and Cosmetics R&D Tax Relief

On the clinical research side of things, it will depend on where you are in the drug development process. Generally, all Clinical Trial development to Phase 3B and prior to FDA, MHRA etc. approval will be eligible activities. The same applies to device development.

Generally, Phase 4 post-approval studies will be excluded, unless there is a specific scientific challenge that remains. Likewise generic drug development is likely to be ineligible, unless there is a scientific challenge that arises. The same applies to device development.

When it comes to Clinical Research Organisations, if you are an UK-based SME BioPharma business, then you will be able to claim for any subcontracted Clinical Trial costs from a CRO as a subcontractor cost in your R&D Claim. However if you are a Large BioPhamra business, you won’t be able to include subcontracted R&D in your claim.

If you are a CRO or a lab, then you will be able to claim for work subcontracted to you by a Large or Overseas business under the RDEC scheme, regardless of your size. If you are working for a UK-based business that qualifies as an SME, these projects would be excluded from a claim. It will be important to establish that for those projects that we can claim, that you are adding value to the clinical trial by developing the protocol, creating project management plans, identifying and contracting with sites, using your own SOPs. If you are simply providing bodies to deliver work for the BioPharma business that has contracted with you then you may just be providing workers. Fee for Service work such as Grant processing as a standalone service wouldn’t qualify as an R&D Project.

If you are a lab and you are developing new assays or processing methodologies to enhance testing protocols for your clients, then you may be able to claim for your own development activities, as well as work subcontracted to you. If you qualify as an SME then your own development could be claimed under the SME scheme and your subcontracted work as RDEC.

On the Cosmetics side of things, if you are developing a new material, or product or creating a new manufacturing process, then you are very likely involved in Research and Development. Also, if you are making an appreciable improvement to any of the aforementioned, you are likely to be involved in Research and Development. Also, if you are aware of an advance already being achieved, but the details of how it has been achieved are not in the public domain (because it is a trade secret), trying to replicate that advance can still be R&D activity, however routine analysis, copying, reverse-engineering or adaption of an existing product is unlikely to be R&D.

We’ve worked with CROs and small BioPharma, we’ve worked a lab that are developing their own assay protocols and performing testing work for clinical trials and for drug discovery. We’ve also worked with a company developing Nutraceuticals. We’ve worked with medical device companies, feminine hygiene product development, an exercise prescription app conducting clinical trials to demonstrate the efficacy of exercise prescription against legacy healthcare solutions.

We’ve worked with Fragrance houses, small cosmetics businesses developing products from newly discovered materials and cosmetics manufacturers.

No, absolutely not. Your project just has to be seeking an advance, it doesn’t have to achieve it. Actually, failure no matter how small, is almost a requirement for a R&D claim. If your project went from start to finish with no deviation, you were either very lucky or you knew what you were doing. In either case, HMRC are likely to suggest that R&D didn’t occur if your project progressed without a hitch. So document and embrace your failures.