27 June 2011

Government publishes consultations on Patent Box and R & D Credits

Earlier this month the Government published consultation documents on the Patent Box and Research and Development (R&D) tax credits as part of its plans to make the UK’s tax system the most competitive in the G20 and to make the UK the best place in Europe to start, finance and grow a business. The Patent Box will apply a 10% corporation tax rate to profits attributed to patents from April 2013. The consultation document sets out detailed proposals for the Patent Box’s implementation, and gives more information about which patents and associated intellectual property types and what income will be eligible.

Proposals published in the R&D tax credits consultation aim to further simplify the scheme by, among other things, changing the rules to extend the credit so that the costs of more contract workers qualify. The Government is also to pilot a process that will allow small companies and start-ups to find out what projects will qualify for the credit at an early stage in their development to assist in planning. The Government would like to explore further with companies the evidence base for moving to an ‘above the line’ credit. The R&D tax credits consultation document also includes the Government’s response to its previous consultation on R&D credits, the submissions to which were considered by the Government when putting together the measures announced at Budget 2011.

The Patent Box consultation document can be found here. This consultation closes on 2 September 2011. Responses should be sent to [email protected] or CT Reform, Corporate Tax Team, HM Treasury, 1 Horse Guard’s Road, London, SW1A 2HQ.

The R&D tax credits consultation document can be found here. This consultation also closes on 2 September 2011. Responses should be sent to [email protected] or R&D Tax Credits Reform, Excise and Enterprise Tax Team HM Treasury 1 Horse Guards Rd London SW1A 2HQ