Lower rate corporation tax to foster innovation

In today's pre-budget report by Alistair Darling, it was announced that the government will introduce 10% corporation tax on profits derived from patents in the UK. 

According to our UK-wide patent and trade mark attorneys, the reduced rate of corporation tax on patent income will help to encourage innovation in the UK at a grassroots level.    

Our very own partner and patent attorney, Nick Wallin, comments:

"The 10% corporation tax on income from patents will incentivise scientific research and development activity.  Patents enable inventors to monopolise a market for 20 years, whilst also providing opportunities for expansion and mobility to other marketplaces.   Whilst we await the firm details of the scheme, it is clear that companies that invest in IP protection for any innovation will enjoy significant tax benefits compared with those that do not.

"This lower rate of corporation tax will help to foster and protect innovation at a grassroots level and this is essential if the UK is to become a true Knowledge Economy.  However, whether the measures go far enough to keep innovators in manufacturing industries is yet to be seen. "

Nick Wallin 
Partner
December 2009