The Patent Box Unlocking the Potential in UK R&D
By ARUN BIRLA & ROSS MCNAUGHTON
The past week saw the introduction of the Patent Box by the UK Government, which is an initiative to drive down corporate tax for innovative and high tech companies in the UK. The regime is set to see a phased reduction of UK corporation tax on profits earned from patents and other related forms of IP to as low as 10% with effect from April 2017. The regime should be of interest to companies and multinationals with, or considering acquiring, significant UK R&D and other technology-focused development operations. Coupled with the government’s additional announcement in the Budget last week to reduce corporation tax generally from a current headline rate of 28% to 20% by 2015 (one of the lowest rates in the western world), the combined intent is to bring about a significant boost to the level of investment and interest of R&D activity in the UK.