GSK to invest £500m in the UK

Posted on 30 Nov 2010 by The Manufacturer

Government’s announcement yesterday of a new 'patent box' with low rates of tax has spurred British pharmaceutical giant GlaxoSmithKline into committing to £500m worth of investment in the UK.

The patent box, announced by Chancellor George Osborne yesterday as part of a wider corporate tax reform programme, though first brokered by the Labour Party in 2009, will see only 10 per cent corporate tax payable on patents registered in the UK. It is scheduled to become active in 2013.

GSK says as a result of this development, it will now commit to building a new biopharmaceutical manufacturing plant in the UK, with the location to be decided next year, and it will contribute towards the construction of a new ‘green chemistry’ facility at Nottingham University.

In addition, GSK will put £50m into a new venture capital fund which will provide investments for early stage healthcare companies and spin outs from UK academia projects in innovative science.

GSK chief Andrew Witty labeled the introduction of the Patent Box “a bold and forward-thinking measure” which will help to make the UK an attractive place for businesses to operate from.

“When implemented, the patent box has the potential to transform the way in which the UK is viewed by companies such as GSK as a location for new investments in high added-value R&D and manufacturing,” he said.

“For too long, while great inventions and discoveries have been made in this country, downstream economic activity in development and manufacturing, and associated employment, have been attracted to other countries which have more favourable corporation tax regimes. In one stroke, the introduction of the UK patent box will help to change this dynamic.”

GlaxoSmithKline is the second largest pharmaceutical firm in the world by value. It employs just short of 100,000 people globally, including 16,000 in the UK across 22 sites.