Tax Incentives for Intellectual Property (UK)
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Presented on World IP Day (26 April 2019) we cover UK tax incentives that support the development of intellectual property (IP) including: R&D Tax Credits Patent Box SEIS / EIS Presented by Steve Livingston | IP Tax Solutions - innovation tax specialists https://www.iptaxsolutions.co.uk
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Tax Incentives for Intellectual Property (UK)
- 1. Tax Incentives for Intellectual Property Steve Livingston | Director - IP Tax Solutions | 26 April 2019
- 2. A BIT ABOUT US… ▰IP Tax Solutions - a specialist tax advisory firm based here at M-SParc ▰Advise companies from ambitious start-ups to international groups on accessing and optimising Government tax incentives such as: ○ R&D tax credits ○ Patent Box ○ Seed EIS / EIS ▰Proud to be advising some of the UK’s leading-edge SME companies
- 3. WHAT WE WILL COVER Objective is to provide ‘awareness’ of: ▰Why the UK Government is keen to support IP-rich companies ▰How Government tax incentives can apply at each stage of growth ▰What tax incentives are out there to support you in developing IP
- 4. WHY THE GOVERNMENT IS KEEN TO SUPPORT IP-RICH COMPANIES ▰Shows that the UK is “open for business” ▰Ambitions to be THE destination of choice in the G20 for global companies ▰Phased introduction of a series of IP related tax incentives ▰Recognition that IP creation generates high value jobs and export opps ▰Keeps pace with other countries that have similar tax incentives ▰Retains and attracts IP-rich companies in the UK ▰Won’t mention the “Brexit” word!!!
- 5. INNOVATION LIFECYCLE Start-up Phase ▰Start-ups and growing companies can attract funding for IP development under the ○ Seed Enterprise Investment Scheme (SEIS) or ○ Enterprise Investment Scheme (EIS) Development Phase ▰R&D tax credit relief – one of the most generous tax reliefs in the UK tax code Commercialisation Phase ▰Patent Box provides a beneficial rate of corporation tax for qualifying patents
- 6. SEIS / EIS - RAISING FUNDING GROWTH ▰SEIS for early stage companies (trading less than two years) ▰Can raise up to £150,000 ▰Investors receive 50% income tax relief and ‘CGT-free’ exit ▰EIS is for growth companies (typically less than 7 years old) ▰Can raise up to £5m per year ▰Investors receive 30% income tax relief and ‘CGT-free’ exit
- 7. R&D TAX CREDITS ▰Can apply to any company and can be claimed year on year ▰Average claims £50,000+ ▰For development of new or improved products, services or processes ▰Can benefit profitable companies - up to 25% of qualifying exp recoverable ▰Can benefit loss-making companies - up to 33% of qual exp recoverable ▰Claimed in year end corporation tax return - retrospective relief
- 8. PATENT BOX ▰Came into effect from 1 April 2013 ▰Provides a beneficial rate of corporation tax of 10% (v 19%) ▰Beneficial corporation tax rate applies to worldwide profits derived from qualifying patent income ▰It is an elective tax incentive which companies claim via their company tax return
- 9. OTHER IP TAX RELIEFS ▰Video Games Tax Relief ▰Film Tax Relief ▰Animated Tax Relief ▰High-end Television Tax Relief ▰Children’s Television Tax Relief ▰Theatre Tax Relief ▰Orchestra Tax Relief
- 10. ANY QUESTIONS? Steve Livingston LLB FCA Director - IP Tax Solutions Ltd innovation tax specialists | Patent Box | R&D Tax Credits | SEIS / EIS T: 01248 305002 / 0161 961 0096 M: 0791 717 3753 E: stevelivingston@iptaxsolutions.co.uk