Seminar hears how R&D tax breaks can boost innovation – yet many firms are failing to cash in

October 23, 2019

Innovative businesses are missing out on millions of pounds of potentially valuable tax breaks by failing to take advantage of government-backed schemes to boost research and development, an event in Bristol was told.

Hosted by the city office of financial and professional services firm Smith & Williamson, the seminar heard how incentives such as R&D tax credits and the Patent Box regime fit into the R&D cycle and how businesses can leverage innovation and intellectual property (IP) to make successful claims for funding through them. 

The event, called Patent Protection and Tax Incentives for Companies, attracted an audience of finance directors, entrepreneurs and other senior board members, who heard from Smith & Williamson expert Clare Anderson and George Tebbutt, a partner in the Bristol office of Haseltine Lake Kempner, one of Europe’s leading IP firms focusing on patents, trademarks and IP litigation.

Clare, pictured, is a senior manager in the firm’s Bristol office and leads on R&D and Patent Box advisory for the South West.

She told the gathering that the Patent Box regime enabled companies to apply a lower rate of Corporation Tax to ‘profits’ earned in relation to patents.

“R&D tax credits and the Patent Box regime were created as incentives to encourage companies to invest in innovation in the UK,” she said.

“Patent Box take-up remains low however, and only 3% of businesses that are eligible have applied it to their profits.

“By contrast there has been a sharp increase in the number of R&D tax incentive claims carried out in the UK in recent years due to increased awareness, and the increased number of boutique advisers, which makes it easier for businesses to make claims.

“One of the biggest barriers remains time, as it takes 18 months to two years after the R&D has been carried out before the benefits come through – so a real-time approach is needed.”

George Tebbutt added: “The key for businesses is to identify those responsible for R&D and IP management and to put in place procedures for identifying in-house research.

“Use patent applications as evidence and knowledge-capture for R&D tax claims and consider whether electing in to the Patent Box regime is appropriate for your business.”

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