If your company is in the pharmaceutical industry and you've recently introduced a new drug or developed a new piece of technology then there is a strong chance that you could benefit from an R&D Tax Credit claim.
Although similar to other industries, the types of pharmaceutical activities considered R&D are different due to the nature of testing procedures required to meet regulatory requirements. The time taken from the earliest research stages on a particular drug to market is usually in the order of a decade. And only a small percentage of promising compounds identified in early research end up with regulatory approval.
R&D in the pharmaceutical industry typically takes place in four stages:
This phase is concerned with the identification of promising new chemical entities.
Pre-clinical trials are concerned with the non-human testing of compounds. Compounds that are identified as promising at the pre-clinical trial stage move into clinical trials.
Clinical trials go through three phases, they could generally be described as toxicity tests (phase 1), preliminary efficacy tests (phase 2) and comparative efficacy and tolerability tests (phase 3). Work in these first 3 stages will likely be considered R&D. This will likely include work on applying to and responding to the regulator, and work on doing further testing as requested by the regulator. Most of the work involved in making an application to the regulator would involve work that directly contributes to the resolution of technological uncertainty and would therefore qualify as R&D.
The post-launch phase occurs when a product has been licensed. Thus this phase involves post-marketing confirmatory studies, special interest studies, longer-term efficacy, tolerability etc. Work in this phase would generally not be considered R&D unless the work involved a scientific or technologically advanced uncertainty.
It seems to be the case that the research activities of discovery, pre-clinical development and Phase 1-3 trials will usually be concerned with the resolution of scientific and technological uncertainty, but that phase 4 (post-launch trials) will not. Our experience has shown that this is generally an appropriate starting point for examination of claims from pharmaceutical companies. If there are unusual circumstances meaning R&D is done in Phase 4 trials, or not done in some elements of phase 1-3 trials, then this can be examined further. What is important with every claim is that the company claiming can demonstrate by reference, what it has actually done and that the expenditure incurred is based on R&D.
By profiting from our specialist knowledge and experience, you can be sure of maximising your R&D tax relief claim. As a rule, Myriad Associates submit R&D tax relief claims that are up to three times higher than in-house prepared claims or those filed by generalist accountants.
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This R&D tax credits calculator estimates the amount of corporation tax savings you may be entitled to by making a claim for R&D tax relief.