Research tax breaks to boost innovation
More details have been released on proposed changes to some of the tax reliefs available for firms that invest in research and development, and new products.
The changes come as part of Government plans to make the UK's business tax system more competitive and dynamic, and to add to the attractions of starting and financing enterprises here. Under the proposals, first announced in this year's Budget, the R&D tax credit system is to be simplified. One change would see the credits extended so that they cover the costs of more contract workers. Also on the agenda is a pilot that will allow small companies and start-ups to find out what projects will qualify for the credits at an early stage in their development in order to make planning easier.
Another innovation is the Patent Box. As from April 2013, the scheme will mean a corporation tax charge of just 10 per cent on profits that stem from patents. The latest Government document provides more information on which patents and associated intellectual property types and on what income will be eligible.
It is hoped that the Patent Box will provide an incentive for companies in the UK to take existing patents to the market and to develop new innovative patented products, so boosting the country's reputation as a world leader in new technologies.
The changes are now out for consultation so that businesses can make their comments.
David Gauke, Exchequer Secretary to the Treasury, said: "This Government is committed to putting in place the most competitive tax system in the G20 and we particularly want to make the UK an attractive location for innovative industries. The Patent Box and R&D credits help us create the best possible environment for this. We welcome responses to both of these consultations from industry and from tax professionals."
The Patent Box consultation document can be found here : and the R&D tax credits consultation document can be found here.
With many thanks to Bill Hay and Co