So what's in this year's Budget? Most of the new stuff in the Finance Bill we already know about (patent box, changes to R&D etc). Nevertheless, some new and useful things directly for IP came sidling out of the red box:
New creative industries relief
Much requested, here at last!
- Video games industry relief
- Quality TV ("Birdsong" was the Chancellor's example) relief
- TV Animation relief (aka the "Wallace and Grommit relief"
VAT relief for European Research Infrastructure Consortia (ERICs)
Secondary legislation will be introduced in autumn 2012 to provide VAT relief for European Research Infrastructure Consortia – no more details yet.
Patent box update
Various tweaks have been announced:
- the legislation has apparently (not yet published) been clarified to ensure that that worldwide income from inventions covered by a qualifying UK or European Patent Office patent is included.
- the heads of expenditure included in the amounts which have to be marked up have been clarified; and
- the small claims safe harbour that previously applied to all companies has been limited to companies making profits with residual profits of no more than £3 million.
As announced late last year, there will be a new ‘above the line’ R&D tax credit in Finance Bill 2013 to encourage R&D activity by larger companies. The Government will consult on the detail (supposed to be published today, but no sign of it so far). It will ensure that SME R&D incentives are not reduced as a result of this change, thankfully.
Not specifically IP but useful to IP companies:
Investment – relaxing EIS & VCT rules
The EIS and VCT schemes allows small companies to raise cash with tax relief for the investors. The changes will widen the definition of shares which qualify for relief; and remove the £500 minimum investment limit.
Subject to State aid approval, legislation will also be introduced in Finance Bill 2012 to increase the thresholds for the maximum size of qualifying company for both EIS and VCTs and the maximum annual amount that can be invested in an individual company under all the venture capital schemes.
The quid pro quo, because there had to be one, is that the total investment which a company can receive in one year will be £5 million in total from any State-aided risk capital measure, including EIS and VCT.
Corporate tax rate
The company main tax rate is being cut again - it will be 24% from April 2012 (rather than the 25% previously announced) and will be 22% by April 2014 if the Chancellor doesn't cut it again!