A government consultation on the Patent Box Scheme which opened on October 22nd will run until December 4 2015. The government will essentially ensure the UK’s tax regimes comply with the Organisation for Economic Cooperation and Development’s (OECD) recommendations.
Michael Jaeger, patent attorney at Withers & Rogers, said:
“The launch of the consultation is welcome news and it will allow innovative UK companies to plan for their future with more certainty.
“The government has now made its position on the Patent Box Scheme clear, which is very important for UK businesses and innovation. This should remove any doubt for companies who undertake their R&D activity in the UK, allowing them to receive the same level of tax relief on patented technologies.”
With this latest consultation, the government is simply addressing the necessary recommendations made by the OECD and tweaking the existing scheme, rather than making any radical changes.
Michael added:
“Since the joint UK-German statement on amendments to Preferential IP Regimes, such as the UK Patent Box Scheme, was issued last November, we’ve heard very little about the extent of the changes which had caused some initial concerns. There were worries that the rate of tax relief enjoyed by many UK companies would be cut off at short notice.”
The UK’s Patent Box Scheme came into effect in April 2013, allowing companies tax relief on any profits earned from their patented inventions. The Scheme applies to patents granted by the UK Intellectual Property Office and European Patent Office. Of note, the consultation states that to date 639 companies have benefited to the tune of £335m of tax savings.
The government’s draft legislation on the UK Patent Box Scheme will be published in December and a response to the consultation also announced in spring 2016, including any necessary further changes.
The consultation document can be read here.