The UK Autumn Budget offered little in the way of new measures specifically for the life sciences sector, though incentives for early-stage businesses could help certain biotechs looking to establish themselves in Britain.
At the heart of the government’s aim is a new tax relief for founders looking to scale their companies in the UK. Called “Founders Relief”, the framework will offer eligible founders of high-growth, innovative companies a reduced 10% rate of Capital Gains Tax on up to £10m of lifetime gains. This marks a steep markdown from the standard rate of 18%. There are several scaling, innovation, and business activity criteria that need to be met for a founder to qualify for the scheme.
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Reacting to the Budget, BioIndustry Association (BIA)’s CEO Chris Molloy said: “Although there is broad merit in the Founders’ Relief, the initial inclusion criteria are more relevant to high street businesses, not high-tech, VC-backed biotechs. We shall be working with members and Treasury during the next month’s consultation period to ensure the needs of biotech founders are well understood.”
Gail Vallis, corporate and life sciences partner at law firm Gardner Leader, disagreed, commenting: “This is great news for those taking substantial risks in setting up promising new companies, especially at the cutting edge of R&D in areas such as life sciences, but misses the mark for those who have taken the same risks on an existing early-stage company or those that have saved a struggling business. It will be very interesting to see what the qualifying conditions will be for a company to be considered high growth or innovative.”
Alongside the relief, people starting a business will have their trading allowance tripled to £3,000. The government said it would also improve venture capital (VC) schemes and simplify access to R&D tax reliefs, as well as making it easier for employees to own shares in the companies they work for.
Chancellor John Healy announced a £20.4bn boost to the National Wealth Fund and British Business Bank (BBB). The latter is a key financing vehicle for British small and medium-sized enterprises (SMEs).
Molley said: “We are pleased to see the Chancellor fuel the life sciences innovation engine through an increased and front-loaded budget for BBB that will back funders and companies across biotech and dual-use technologies.”
This Budget also brings new legislation to make non-compete clauses less of a barrier for startups and scaling firms to attract talent, with guidance slated for release in early 2027.
The government said the steps will help achieve its ambition in making the UK “the best place in the world to start a business, scale it, and stay here for the long term”.
One of the few life science-specific announcements was a series of public-private investments worth over £1bn, though only £70m of this was backed by government grants. US biopharma Vertex Pharmaceuticals is opening a new £300m facility in Oxford, medtech specialist Convatec is investing over £500m over the next decade in a new R&D hub in Manchester, and CDMO Kindeva is pumping £200m at its base in Loughborough.
Vallis commented: “£70m of grant funding is fantastic too, but that won’t go far for companies looking to take their drugs through clinical trials. Work is still required to attract investors to invest more widely across the sector.”
The Budget comes at a time of renewed hope in the UK’s biotech sector. A report released this week by the BioIndustry Association (BIA) has found that the UK is likely on track to post its best year since 2021 for biotech VC acquisition.
As the British life sciences funding scene looks to get back to winning ways, M&A has already seen notable success so far this year, with three acquisition deals above $1bn of British biotechs in 2026. The most expensive of these was Eli Lilly purchasing sleep drug biotech Centessa Pharmaceuticals for up to $7.8bn in June. However, the wait for a biotech listing in the UK this year goes on, reflecting hesitancy around the nation’s wider macroeconomic health.
