Budget: tax breaks and patent box welcomed by industry
Friday 23 March 2012
Tax breaks, the patent box and research funding were the three main issues of interest for companies in George Osborne's third Budget.
The private sector benefits from a headline rate of corporation tax cut from 26 per cent to 24 per cent next month. A series of further falls will leave the rate at 22 per cent in April 2014.
A new £100m fund to 'support investment in major new university research facilities' was also announced, although the detail is yet to be revealed.
The Budget confirms that Labour's 'patent box' idea will be implemented to encourage investment in research and development and related manufacturing in the UK, by introducing a lower rate of corporation tax on profits generated from UK-owned intellectual property.
It will come into effect from April 2013, introducing a lower corporation tax rate of 10 per cent (the main rate of corporation tax will be 23 per cent at that time).
Mr Osborne said the government would soon publish its alcohol strategy 'to address the growing problem of alcohol abuse, and the many billions of pounds it costs our NHS'. The Chancellor of the Exchequer also confirmed that a social care White Paper is due at some point this year.
Stephen Whitehead, chief executive of the Association of the British Pharmaceutical Industry, said the measures would help improve the UK's general business environment and 'allow pharmaceutical companies operating here to remain competitive in a global market'.
'Specifically, moves towards a more competitive tax regime, including a further reduction of corporation tax so that the UK has among the lowest rates in Europe, are welcome.'
In the same week, GlaxoSmithKline has announced that it will invest £500m in manufacturing in the UK, including the building of a new factory in Cumbria - the company's first new UK factory for 40 years.
GSK's chief executive, Sir Andrew Witty, explained that the patent box was a major draw for his company, explaining that it 'has transformed the way in which we view the UK as a location for new investments'.
Also this week
HM Treasury website: Budget 2012
Wellards News, March 2011: Industry hails coalition government's second budget
Wellards News, December 2010: Industry and charities hail tax breaks on innovative companies