To ask His Majesty's Government what plans they have, if any, to offer tax credits on (1) a broader range of intellectual property, and (2) capital spending.
Answered on
30 January 2023
The Government already supports investment through a range of tax reliefs.
The Patent Box incentivises the commercialisation of intellectual property (IP) in the UK through enabling companies to pay a reduced rate of Corporation Tax, 10 per cent, on profits attributable to patents and other similarly robust IP.
Capital allowances let taxpayers write off the cost of certain capital assets against taxable income. The Government is permanently setting the Annual Investment Allowance at its highest ever level of £1 million, instead of letting it revert to £200,000 from 1 April 2023. This amounts to full expensing for an estimated 99 per cent of businesses, which means that businesses can write off the cost of qualifying plant and machinery investment in one go. For expenditure on intangible assets, relief is available through the intangible fixed asset regime. Where expenditure does not qualify as capital expenditure, but qualifies as a business expense, it will generally be expensed in year.
Like all areas of the tax system the Government keeps the tax treatment of IP and capital expenditure under review.