News on the Patent Box and the R&D tax credit proposals
HM Treasury is expected to publish draft legislation on 6th December 2011, covering both the Patent Box and the R&D tax credit proposals. The draft legislation will be open for comment until 10th February 2012. The Chancellor may also comment on the proposals in his Autumn Statement on Tuesday 29th November.
HM Treasury’s consultation on the Patent Box was published on 10 June 2011 together with a linked consultation into research and development (R&D) tax credits. Both consultations closed on 2 September 2011
The Patent Box proposal is aimed at companies that obtain profits from patents and the current proposal is to introduce, from 1 April 2013, a preferential regime of a 10 per cent rate for profits arising from qualifying patents. It is one of a group of corporate tax measures aimed at creating the most competitive tax system in the G20 for the UK.
The Patent Box regime as proposed will be optional. It is intended to enhance the UK’s competitiveness and to make the UK tax regime competitive for innovative high-tech companies. It is likely to be of particular benefit to companies in the pharmaceuticals, life sciences, electronics and defence sectors.
Companies in these sectors will need to establish what patents and patent incomes fall within the proposed patent box and then evaluate the patent box regime along with the R&D tax credit to see whether the UK is the right place to locate these patents.
For more information see:
HM Treasury's further consultation on the patent box
HM Treasury's Research & Development (R&D) Tax credits: response and further consultation
Lawyers Nikol Davies, Michelle Williamson
