Research and Development (R&D) Tax Incentives:
Creative, Screen, Digital, Tech
The UK offers several tax incentives for businesses developing and managing intellectual property (IP).
And if you are interested in collaborating with universities, take a look at our information on R&D. We can help you collaborate with universities in Tay Cities Region. Interface can help you collaborate with universities across Scotland.
Intellectual Property (IP)
IP in these sectors includes:
- Patents: Protecting new inventions and technological advancements.
- Trademarks: Protecting brands, logos, and slogans.
- Copyrights: Protecting creative works like films, music, software, and literature.
- Design Rights: Protecting the appearance, shape, and configuration of products.
Research and Development (R&D)
Qualifying R&D activities typically involve:
- Innovative Projects: Developing new products, services, or processes.
- Technological Advancements: Improving existing technologies or creating new ones.
- Scientific Research: Undertaking projects that seek to resolve scientific or technological uncertainties.
These activities should aim for advancements in technology and creativity, often involving significant investment in innovation and development.
For more detailed information, take a look at Creative UK.
Key Incentives
Patent Box
The Patent Box scheme allows companies to apply a lower rate of Corporation Tax to profits earned from patented inventions. Eligible companies can benefit from a reduced tax rate of 10% on qualifying profits. To qualify, a company must:
- Be liable for Corporation Tax.
- Make a profit from exploiting patented inventions.
- Own or exclusively license the patents.
- Have undertaken qualifying development on the patents.
For more details on the Patent Box, you can visit the GOV.UK Patent Box page (GOV.UK).
Research and Development (R&D) Tax Credits
R&D tax credits are available to companies that undertake projects seeking to achieve an advance in science or technology. These credits can provide significant tax relief:
- SMEs: Can claim a tax credit worth up to 33% of their qualifying R&D expenditure.
- Large Companies: Can benefit from the R&D Expenditure Credit (RDEC) which offers a taxable credit of 13%.
The eligibility criteria are broad, covering a wide range of activities. For more information, visit the KPMG Innovation Reliefs and Incentives page (KPMG).
Using Intellectual Property for Tax Reliefs
Deloitte highlights that effectively managing and leveraging IP can lead to substantial tax savings. For instance, companies can benefit from IP by applying for patents and utilizing the Patent Box regime, thereby reducing their effective tax rate on profits derived from patented technologies. More insights are available on the Deloitte IP Tax Reliefs page (Deloitte United States).
These incentives are designed to support innovation and development in the UK, making it financially advantageous for companies to invest in IP and R&D.