Tax relief scheme for tech firms under threat from Europe
Hitech firms are being warned that they should take advantage of tax relief on patent related profits now before a threatened clamp down by the European Union according to Richard Hopes, Partner at Alliotts accountants based in Surrey and London.
Richard Hopes, Partner at Alliotts accountants and a specialist in dealing with tech firms across the region said:
“A tax relief scheme called Patent Box was brought in by the UK Government in April 2013 which was designed to help businesses who apply, to patent their ideas to pay lower rates of tax on their profits. This has been of benefit for businesses in the technology sector who already have their own patents or IP or who may be considering applying for patents. The scheme aimed to encourage innovative SMEs to stay in the UK rather than move their base abroad and it has been successful in doing that.
“Frustratingly, this scheme is now under threat from the EU who consider that it may lead to unfair tax competition among EU member states. According to Europe the UK scheme breaches the EU code of conduct for business taxation which is intended to prevent EU member states from operating policies that result in harmful tax competition. If Europe has its way, the UK Government may be forced to amend this tax benefit and bring it into line with European policy on fair competition. “Those firms who are considering taking advantage of this tax benefit should do so now to take advantage of any tax benefit available currently.“