The UK government delivered its Autumn Budget on 28 October 2026. At first sight, the Budget contains relatively few announcements specific to the life sciences sector. Many more announcements pertain to the financial, tax and regulatory systems on which the sector depends. Industry associations in the life sciences sector have welcomed several proposals, while also expressing concerns around how certain measures work in practice. 

Below, we consider how the Budget impacts a life sciences business as it develops, from being founded to commercialisation and patient access. 

Starting out

Nascent life sciences businesses may benefit from the proposed Founders’ Relief. From April 2027, the government proposes that Founders’ Relief will offer a reduced capital gains tax rate of 10% on up to £10 million of lifetime gains from qualifying disposals. 

Whilst intended to incentivise business, the BioIndustry Association (BIA) has questioned whether the initial criteria would be relevant to venture capital-backed biotechnology companies. Under the current proposed criteria, companies would need at least £10 million of turnover and 15 qualifying full-time employees before disposal, as well as meeting two growth or innovation tests. Pre-revenue companies would therefore fall outside the proposal, however valuable their research. The detail of the relief is under consultation, and it is hoped that  the conditions will be revised to accommodate businesses whose value develops ahead of sales.

Separately, the announced technical changes to existing venture capital schemes aim to make life a little easier for companies seeking investment. The changes are intended to improve the ‘usability’ of the Enterprise Investment Scheme, Seed Enterprise Investment Scheme and Venture Capital Trusts. The changes reflect a wider theme of this Budget, with the Chancellor making small adjustments to simplify administration for both businesses and individuals.

Research and Development

To make the UK a more competitive destination for R&D, the national funding agency UK Research and Innovation will focus £1 billion over four years on priority innovation clusters aligned with the government’s Industrial Strategy sectors. These are the eight sectors that the government has identified as high-growth, and includes life sciences. 

The Chancellor also furthered his efforts to make life easier for businesses by reducing the administrative work involved in claiming R&D tax relief. The Claim Notification Form will be removed from 1 April 2027, and the Additional Information Form simplified from autumn 2027.

Investment and finance

The most significant sector-specific announcements concern three projects in a public-private investment package:

• ConvaTec plans to invest over £500 million over the next decade in a new global R&D hub in Manchester, focusing on wound and ostomy technologies.
• Vertex Pharmaceuticals will invest over £300 million in an Oxford facility researching early-stage drug discovery.
• Kindeva will invest £200 million in respiratory-medicine manufacturing in Loughborough.

Together, the three projects are backed by almost £70 million in government grants to help offset higher costs of operating in the UK compared to some international alternatives. The Faculty of Pharmaceutical Medicine (FPM) welcomed the investment as strengthening the UK’s position as a life sciences leader amidst the intensifying internal competition.

Beyond these three named projects, the Budget increases the financial capacity of the British Business Bank - which supports access to finance for smaller UK businesses across all sectors – by £5 billion. Whilst this isn’t a dedicated life sciences scheme, the BIA welcomed the increased and front-loaded budget, saying it will support investors and companies across biotech and dual-use technologies. 

Regulatory flexibility

The Budget also sets out further details of the Regulation for Growth Bill, which was announced in July 2026. The Bill would allow businesses to test new technologies under temporarily adapted rules, subject to controls and safeguards. If a trial proves safe and effective, then the regulatory changes could become permanent. Innovative medicines and medical devices are specifically identified as being relevant to this approach. 

The FPM has welcomed the measure, saying that this regulatory flexibility will enable innovative products (including medicines) to be rapidly scaled.

Support for public procurement 

Once a life science business obtains funding, develops an innovative product and secures the necessary regulatory permission, it needs a pathway for introduction to patients. The BIA recognised this in its response to the Budget, as it called for stronger NHS adoption of innovative products through innovative medicines procurement. 

Whilst the Budget didn’t mention NHS or medicines procurement, it did propose broad procurement reforms under a new ‘National Procurement Policy Statement’. The policy statement – due in March 2027 - will prioritise jobs, fair pay and skills. The statement will also define “UK supplier”, although it is unclear whether such a classification will affect purchasing decisions. For life sciences businesses bidding for public contracts, these changes could make workforce practices and the location of activities more relevant to tender preparation. 

Enabling patient access

One measure will benefit pharmaceutical companies supplying medicines free of charge, such as under early-access programmes or to allow patients to continue treatment after clinical trials. Currently, supplying a medicine free of charge can still leave a pharmaceutical company with a VAT bill. The Budget addresses this through a new 0% rate for qualifying donations made on or after 23 June 2026, including through early and expanded access schemes. 

The Association of the British Pharmaceutical Industry welcomed the change, calling it a “significant win for patients” that removes a barrier to access. 

What next? 

Attention now turns to the 2027 Spending Review, when the government is expected to set out where savings will be made to fund increased defence spending. Industry associations – such as the Campaign for Science and Engineering – have warned that the life sciences sector could bear a disproportionate share of these savings. Likewise, the BIA has urged that support for early-stage life sciences and engineering biology is protected at the Spending Review. 

References:

BIA Press Release - 29 October 2026

FPM Statement on Budget - 28 October 2026

ABPI Press Release - 28 October 2026