Life Sciences and MedTech R&D Tax Credit Specialists
Life sciences companies are some of the most natural R&D claimants, because most of their work seeks scientific advances with uncertain outcomes. Many early stage biotech and MedTech companies are loss-making and research heavy, which often makes them eligible for ERIS at up to 26.97p per pound.
What life sciences work qualifies?
Examples that can qualify
- Drug discovery, target validation and pre-clinical research
- Formulation and stability work where the outcome was uncertain
- Developing diagnostics, assays or biomarkers
- Medical device design, prototyping and verification
- Clinical trials that test safety or efficacy
Examples that usually do not
- Routine regulatory submissions and dossier writing
- Post-approval marketing studies with no scientific uncertainty
- Patent filing and legal costs
- Routine manufacturing of approved products
Is ERIS relevant to my company?
ERIS is relevant if your company is a loss-making SME whose R&D spending is at least 30% of total relevant expenditure. For a research led company funded by investors, that threshold is often met. The intensity test includes connected companies, and a one-year grace period can help if you dip below 30%. See our ERIS claims page.
What about overseas trials and CROs?
Since April 2024, contracted-out R&D and externally provided workers generally need to be in the UK to qualify. There is an exception where the work must be done abroad because of geography, environment, population or a legal or regulatory requirement, which can apply to some clinical trials. Cost or availability of staff is not enough. HMRC's targeted advance assurance can cover whether overseas expenditure qualifies.
What costs do life sciences companies claim?
Typical costs include scientists' staff costs, consumables and reagents, payments to clinical trial volunteers, software and data licences, and qualifying contracted-out research. Grant funding no longer moves projects into a lower relief under the merged scheme, but it still needs careful handling in the claim.
What should a life sciences specialist bring?
A life sciences specialist should have scientists who can read your lab books and trial protocols, understand where the uncertainty lies, and handle the interaction between ERIS, grants, overseas work and the PAYE cap.
Example: how a life sciences uncertainty is described
Illustration. A diagnostics start-up needed a test that detected a biomarker at concentrations below the limit of published assays, using a sample type that interfered with standard chemistry. The scientists tested alternative capture molecules and signal methods across many experiments, most of which failed to separate signal from noise. The experiments, reagents and scientists' time were R&D; regulatory documentation and marketing were not.
Typical cost profile
| Cost type | How often it features | What to watch |
|---|---|---|
| Scientists' staff costs | Almost always | Apportion time on research, not regulatory or commercial work |
| Reagents and consumables | Very common | Exclude materials in products sold |
| Contract research organisations | Common | From April 2024, overseas work generally excluded unless conditions require it |
| Clinical trial volunteer payments | Common in clinical stage companies | A separate qualifying category |
| Software and data licences | Common | Include bioinformatics tools and datasets used in R&D |
What does HMRC focus on in life sciences claims?
- The ERIS intensity test and connected companies
- Overseas trials and CRO work under the April 2024 rules
- Whether later stage clinical work still involves scientific uncertainty
- The PAYE cap where the company relies on contract research
When does clinical work stop being R&D?
Clinical work is R&D while it is resolving scientific uncertainty about safety or efficacy. Studies after approval that only gather marketing evidence, or routine monitoring, usually are not. Each phase should be assessed on its own facts.
What should you ask an R&D specialist about life sciences claims?
- Do you have scientists who can read our lab books and protocols?
- Can you show the ERIS intensity calculation across connected companies?
- How will you treat overseas CRO and trial costs after April 2024?
- Will you check the PAYE cap and its exemption?
Life sciences claims are often large and depend on ERIS, so the intensity test and overseas costs deserve a specialist's full attention.
Frequently asked questions
Do clinical trial volunteer payments qualify?
Yes. Payments to volunteers taking part in clinical trials are a qualifying category of R&D expenditure.
Can we claim for work by a university partner?
It depends on the contract. Payments to qualifying bodies such as universities can be treated differently, so get advice on each arrangement.
Does Innovate UK funding stop us claiming?
Not under the merged scheme or ERIS for periods from April 2024, but the grant must be dealt with correctly and some funding conditions can affect the claim.
Can a company with no revenue claim?
Yes. A loss-making company can surrender losses for a payable credit, and ERIS may give up to 26.97p per pound if it meets the intensity test.
Do regulatory submissions qualify?
Usually not. Preparing dossiers and regulatory documents is routine, although the underlying research may qualify.
Does the PAYE cap affect biotech start-ups?
It can, especially where most research is done by contract organisations rather than employees. Check whether the exemption applies.
Get matched with a vetted R&D tax specialist
Tell us what you do and roughly what you spend on development. We check the basics, then introduce you to a specialist from our panel whose sector experience fits your work.
- Free to use, with no obligation to appoint anyone
- Introductions only to firms that meet our panel criteria
- Fee terms in writing from the firm before you sign anything
- We flag claim deadlines we can see from your answers
Our matching service is free for businesses. Specialist firms on our panel pay us a fee when we introduce a business to them. That fee does not change the price a firm quotes you, and you are never obliged to appoint anyone we introduce.