Darling proposes tax break for innovators
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Income which ‘stems from patents’ to be taxed at just 10% under scheme proposed in Chancellor’s pre-budget report
The government has proposed a corporate tax break for companies that develop intellectual property, in a move that may have repercussions for the UK’s IT industry.
"We've won more Nobel prizes than any country of our size," Chancellor Alastair Darling said to parliament during today's pre-budget report, the last before next year's general election. "We need to do more to support this ingenuity and ensure this creativity is harnessed in this country."
The introduction of a 10% tax rate on income that ‘stems from patents’ will promote innovation and help to secure jobs in the UK's science and technology industries, he said.
The Chancellor also confirmed that the government would be pushing on with £5 billion worth of cuts from spending programmes by 2013, including scaling back much-delayed NHS IT and prison systems projects. The decision to cut back on these projects was "tough", but necessary, he said.
Elsewhere, the government reiterated its plan to introduce a controversial £6 per year phone line tax to help fund the nationwide roll out of 'super-fast' broadband services.
Mr Darling painted a bleak short-term picture for the prospects of UK businesses, predicting that the economy will shrink by 4.75% during 2009, up from his original estimate of a 3.5% contraction made at his budget announcement in April. However, he did insist that the country was on course to return to growth in 2010 and 2011.
