Rewarding Healthcare Innovations with R&D Tax Credits
R&D in healthcare doesn’t end with pharmaceutical labs or equipment manufacturers; local GPs, hospitals and private healthcare facilities could be developing healthcare innovations and benefiting from HMRC’s R&D tax credit initiative.
R&D Support For Healthcare Innovations
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.
Eligible Healthcare Innovations
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
Qualifying R&D Healthcare Costs
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:
- People: Salaries, wages, employers NICs & pension contributions
- Subcontractors: Using third parties to help solve the technological uncertainty
- Consumables: Raw materials consumed in the prototyping and testing process (e.g. chemicals, flour, electronic components, etc.)
- Utilities: Heating, lighting and power
- Software: Software licences used to deliver your R&D project (e.g. AutoCAD; SolidWorks)
How To Claim?
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.