Rewarding Healthcare Innovations with R&D Tax Credits

Healthcare R&D focuses on improving the health and well-being of patients and the efficiency of our healthcare services.

It’s encouraged by the Public Health Agency’s HSC R&D Division, the Department of Health’s R&D Health and Social Care Strategy, which promises over £10 million annually, and as a key eHealth approach in their Health and Wellbeing 2026: Delivering together plan.

However, in 2000 the UK Government also introduced the R&D tax credit initiative to encourage and reward R&D within limited companies or PLCs. Today the initiative offers organisations an additional tax reduction of up to 26p (33p if you are surrendering a loss) for every qualifying pound spent on R&D.

If you tried to fill a healthcare service gap by attempting to develop new or modify existing products, services or processes, R&D tax credits may be available to your organisation. So long as your healthcare innovations tried to advance the scientific or technological knowledge within your field, and underwent a process of trial and error, you could receive valuable tax relief.

Below are some examples of qualifying healthcare innovations:

• Bespoke software, to help improve internal operations
• Mobile health apps for areas such as mental health
• Wearables such as activity trackers
• Pharmaceutical drug development
• New medical devices and equipment
• Prosthetic and biomechanical advances, most recently using 3D printing
• Diagnostic software
• Telehealth at-home monitoring devices used to treat long-term conditions such as heart disease
• Artificial intelligence, which recently appeared in the form of virtual assistants

There are five R&D cost categories in the initiative and they cover your healthcare innovations’ expenses from the start to the end of the investigative and development phase:

1. People: Salaries, wages, employers NICs & pension contributions
2. Subcontractors: Using third parties to help solve the technological uncertainty
3. Consumables: Raw materials consumed in the prototyping and testing process (e.g. chemicals, flour, electronic components, etc.)
4. Utilities: Heating, lighting and power
5. Software: Software licences used to deliver your R&D project (e.g. AutoCAD; SolidWorks)

Although you can complete an R&D tax credit claim on your own, the data analysis and case study requirements involved in the process can be complex. Therefore, to ensure you get the maximum benefit and a justifiable HMRC claim for your healthcare innovations it is best to seek specialist advice from a company such as Amplifi Solutions.

Explore our site to find out more about Research and Development Tax Credits, discover how much R&D tax relief you could receive and more about our service.