The Government has confirmed its plans, announced in the Pre-Budget Report (PBR) 2009, to introduce a reduced rate of corporation tax of 10% for income from patents from April 2013, in a bid to encourage more products being manufactured in the UK.
The PBR 2009 stated that it would apply to patents granted after the Finance Bill is passed in 2011 – this will still be the case. However, the Government’s consultation regarding the design of the Patent Box will also consider how to include patents not yet commercialised at that point, and how the regime will apply to equivalent overseas patents held by UK companies. The consultation with businesses will take place during summer 2010.
This announcement is to be welcomed, although it was hoped that the Government may have extended this incentive to other intellectual property, to compete with other more competitive regimes in the international market.