News Flash: 2012 Budget confirms the UK government's commitment to cutting taxes on patents

Today the Chancellor announced a Budget designed to "turn Britain into Europe's technology centre" with a range of benefits for technology-based companies, especially small start-up businesses:

  • Tax relief on income from patents according to the Patent Box scheme
  • Continuation of R&D tax credits with an "above the line" incentive
  • Investment in major new university research facilities
  • Support for the life sciences, aerospace and digital industries
  • New tax credit scheme for companies creating video games, animation and high-end television productions
  • Easier rules allowing academics to convert research into commercialisation
  • Increased grants under the Enterprise Management Incentive scheme to help start-up companies recruit and retain skilled employees
  • Headline rate of corporation tax cut from current 26% to 24% from April 2012, reducing to 23% in 2013 and 22% in 2014
  • Simplified tax rules for small businesses (with a turnover of up to £77,000)
  • Tax rate limited to 20% for small companies

For more information on the proposed Patent Box scheme, please refer to our guidance note.