The IP wonders of the UK Budget

The good stuff:

• R&D tax relief increased for SMEs to 200% in 2011 and 225% in 2012 - excellent news, assuming that the EU don't demand something significant in return (because the SME relief is a State Aid)
• R&D tax credit repayment no longer restricted by PAYE/NICs - more money back to loss-making SMEs, but don't celebrate too much as the repayment is likely to be restricted with the reduction in small companies' tax rate
• R&D large company relief to include sub-contractor costs - good news, particularly for SMEs that can only claim the large company relief (eg: because they've received a State Aid grant for the R&D project)
• Minimum qualifying spend removed from R&D relief - nice idea but, if you're spending less than £10k on R&D in any one year, the costs of getting the R&D claim in order will probably be more than the relief you get!
• Patent box to have more consultation – but still 10%, still patents only, applying from 1 April 2013 - next consultation paper due May 2011
• The exemption for IP holding controlled foreign companies with minimal UK connection will be in Finance Bill 2011, as expected - no changes (yet) announced following the consultation.

The not-so-good bit:

• Vaccine research relief for SMEs reduced to 20% for 2011-12, and then scrapped from 1 April 2012 - but only 10 companies a year claim this relief, so it's not likely to have much impact

Non-IP specialist stuff, but still interesting for IP companies:

• Reductions in corporate tax rate - to 20% for small companies in 2011, to 23% for large companies by 2014 - useful to all companies
• Improvements to reliefs for investors (EIS for individuals, VCT for companies) - may make it marginally easier for companies to raise funds
• Capital allowances (tax deduction for buying equipment) for short-life assets doubled – accelerates tax deduction for assets which will be sold/scrapped within eight years of purchase (but note there are better deductions for R&D assets, and for the first £25,000 expenditure on assets in any one year)
• Enterprise Zones could be attractive - 100% reduction in business rates, some increased tax deductions for asset purchases - and there'll be one in London
• £100m on facilities for "commercialisation of research" (echoes of the need to commercialise patents for the patent box), accommodation for innovative SMEs (probably means patent-seeking) and new research capabilities (no, I don't know what that means either)
• A "new" technology and innovation centre for high value manufacturing - by "new", the Government means integrating the activities of various existing centres
• 24 new University Technical Colleges to be established

These are the UK 2011 Budget key points from an IP perspective - if you want to see the more detailed analysis of these points, and a few others, I've put a more tax-focussed analysis up on IP Tax.