Category Archives: tax authorities

Patent box and R&D: UK statistics

HMRC have recently released statistics for take up of the patent box in 2013-14 (the first year of the relief); on the same day, they released the latest statistics on use of the UK’s R&D tax reliefs for the same tax year. They make for some interesting compare and contrast points:

Total claims in 2013-14
– patent box: 700
– R&D tax reliefs: 22,415

Total value of claims in 2013-14
– patent box: £342.9m
– R&D reliefs: £2.45bn

SME claims in 2013-14
– patent box: 475 (68%)
– R&D reliefs: 19,990 (95%)

Value of SME claims in 2013-14
– patent box: £15.7m (5%)
– R&D reliefs: £1.165bn (48%)

The largest claimant sector (for both patent box and R&D) is, unsurprisingly, manufacturing (63% of patent box claims; 30% of R&D claims). The second largest for R&D is Professional, Scientific & Technical, with about 20% of claims – but this sector only made 6.3% of patent box claims. This might relate to the nature of the patent box, and particularly the extra hurdle for claiming on services income. The other sectors are somewhat more difficult to analyse as numbers of patent box claims are so low that sectors have been combined to prevent commercial information being disclosed.

The R&D relief requires a company to be undertaking a project which seeks an advance in the global state of knowledge in an area of science or technology, it would seem logical that a successful R&D-relief qualifying project would often lead to something capable of being patented – and, in the 14 years for which we have R&D statistics, 141,000 claims for relief have been made. Fair enough, R&D relief claims can be made for unsuccessful projects, but out of 141,000 R&D relief claims, it seems pretty likely that there are more than 700 companies within the scope of the patent box … the report doesn’t speculate upon why the take up is so low in terms of numbers (and for comparison, the impact note when the patent box was introduced estimated the first year cost to the Treasury at £500m).

UK: Football & image rights (again, at last?)

Huh. Not entirely sure how or why I’ve ignored football image rights tax issues in the past – possibly because it’s been rumbling around for years. And years. Maybe even a decade.

Anyway, the Telegraph is now reporting that HMRC have concluded a number of image rights settlements in relation to footballers and football clubs (but not Rangers – apparently the tax bill that tipped them into administration related to employee benefit trusts rather than image rights).

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It took HMRC 19 days to figure out that there was a problem and, three days later, they still don’t know how to deal with it.  The problem is, of course, IT-related.  In this case, the online self-assessment system for individuals is still merrily allowing people to opt to have underpaid tax recovered through their PAYE code rather than hand over a cheque to HMRC.  This option was supposed to end on 30 December but the IT system at HMRC refuses to accept that and no-one’s figured out where in the code the off-switch for this option is.

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