The UK Government has expressed its commitment to making the UK a competitive place to do business. Various tax incentives have been put in place to help companies - multinationals and SMEs alike - to innovate and grow in the UK. From Enterprise Zones to Above the Line R&D credit and Patent Box, there is a reason for just about every company to base their operations in the UK.
From ideation to commercialisation, the UK Government supports this policy objective through incentives at each stage of the innovation lifecycle:
The Patent Box regime, effective from 1 April 2013, aims to create a competitive tax environment for companies to develop and exploit patents in the UK, and encourage companies to locate high-value jobs associated with intellectual property (IP) in the UK. Used effectively, Patent Box will allow qualifying companies to claim an additional tax deduction, giving an effective tax rate of 10% on the profits arising from the use of patents. Read more on Patent Box.
The Above the Line credit (also known as the R&D Expenditure Credit), effective from April 2013, is a credit against tax liabilities of up to 10% of qualifying expenditure for larger companies and SMEs able to claim under the large company scheme. Moving R&D above the line will reduce the cost of R&D in financial statements - similar to a grant - hence delivering a higher operating profit and making it more visible to technology departments. Read more on Above the Line R&D credit.
We find that many companies are not aware of which activities could qualify for the incentives. Deloitte employs more than 2,500 tax professionals in the UK. Our R&D team comprises engineers, technologists, transfer pricing specialists, tax specialists and a patent attorney. We can help you: