Biotech Grants and R&D Tax

Biotech Grants & R&D Tax for Biotech: Fueling UK Life Sciences Innovation

The UK’s biotech sector plays a pivotal role in delivering breakthrough healthcare solutions, from next-generation therapeutics to synthetic biology and precision diagnostics. To accelerate innovation in this high-risk, high-reward field, the government offers a range of biotech grants and R&D tax relief opportunities.

FI Group supports biotech firms across the full funding landscape — from securing innovation grants to maximising R&D tax credits. Our PhD-level consultants combine scientific insight with technical tax expertise to help companies navigate the complexities of biotech funding in the UK.

R&D in the Biotech Sector: What Qualifies?

The life sciences sector is defined by continuous research and experimentation. Common areas of qualifying R&D activity include:

Preclinical drug development and optimisation
Molecular biology, immunology, and genomics research
Development of medical devices or diagnostic platforms
Process scale-up, fermentation and biomanufacturing
Overcoming regulatory, stability or scalability barriers

If your project seeks to resolve scientific or technological uncertainties and involves systematic investigation, it is likely to qualify under HMRC’s R&D criteria.

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R&D Tax Relief for Biotech Companies

R&D tax relief supports businesses investing in innovation by reducing their corporation tax liability or providing cash credits. Depending on your company size and funding structure, there are different schemes:

SME R&D Tax Relief

Smaller biotech companies (fewer than 500 staff) may qualify for the enhanced SME scheme:

186% enhanced deduction for qualifying R&D costs
Payable credit of up to 14.5% for loss-making, R&D-intensive SMEs

RDEC / Merged R&D Scheme

For larger firms or SMEs in receipt of grants, the R&D Expenditure Credit (RDEC) or new Merged Scheme applies, offering:

A taxable credit based on eligible R&D spend
From April 2024, one streamlined scheme applies to most companies, simplifying the process

Eligible costs include salaries, EPWs, clinical trial costs, consumables, and cloud/software used in R&D.

FI Group ensures biotech firms understand their eligibility, document scientific work properly, and file compliant claims with minimal HMRC risk.

Grant Funding for UK Biotech

In addition to tax relief, UK biotech innovators can access non-dilutive funding through competitive grants. These grants support everything from feasibility studies to late-stage clinical trials.

Key Grant Sources:

Innovate UK – Offers thematic calls for health, therapeutics, and diagnostics
Biomedical Catalyst – Co-funds translational biotech projects
NIHR i4i – Supports medtech and digital health development
Horizon Europe / EIC Accelerator – Open to UK applicants for collaborative or SME deep tech projects

Grants often fund 50–100% of project costs depending on the TRL stage and applicant type.

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Grant Funding for UK Biotech

In addition to tax relief, UK biotech innovators can access non-dilutive funding through competitive grants. These grants support everything from feasibility studies to late-stage clinical trials.

Key Grant Sources:

Innovate UK – Offers thematic calls for health, therapeutics, and diagnostics
Biomedical Catalyst – Co-funds translational biotech projects
NIHR i4i – Supports medtech and digital health development
Horizon Europe / EIC Accelerator – Open to UK applicants for collaborative or SME deep tech projects

Grants often fund 50–100% of project costs depending on the TRL stage and applicant type.

Book A Meeting

Latest Biotech Grants