The announcement in the Pre-Budget Report (9 December) of a ‘patent box’ mechanism to reduce corporation tax on innovative activity has been praised by the medtech industry.
The patent box means that income from new UK patents granted from 2013 will be taxed at 10%. Consultation on a foreign branch exemption has been initiated.
The HealthTech and Medicines Knowledge Transfer Network (KTN) has welcomed the introduction of the patent box, which it says will help to secure high-value manufacturing in the UK.
The previous Budget announced that the Government would work with business to examine taxation on innovative activity, including intellectual property. The new report indicates that a patent box will be introduced from April 2013 to strengthen the incentives for investment (both domestic and overseas) in innovative UK businesses. This measure is part of the package outlined in the OLS Blueprint.
Doris-Ann Williams, Director General of the British In Vitro Diagnostic Association (BIVDA), said: “BIVDA has been pleased to work alongside Government and other industry colleagues in developing the recent Office of Life Sciences Blueprint, which introduced the patent box proposal. The patent box could provide a real reward for further innovation in this growing sector of industry in the UK. BIVDA is committed to continue to participate to fully support actions from the Blueprint to benefit the economy and ensure uptake of innovative technologies by the NHS.”
To provide support for SMEs during the economic recovery, the Government is also deferring (for a year) the planned increase in the Small Companies’ Rate of corporation tax.