Government Announcement on Lower Tax Rate for Patent Income Welcome News for UK’s Science Sector

The recent announcement that Pfizer will be closing its Sandwich facility, leading to 2,400 jobs losses, has certainly dampened the mood within the pharmaceuticals market, but it’s not all doom and gloom out there.

Recent proposals relating to tax on patent income are already having a positive impact on future scientific research and innovation in the UK and increasing graduate opportunities in the science sector.

Government ministers announced at the end of last year that a new “patent box” regime will be introduced in the UK; from 2013, businesses will pay a new lower rate of 10% corporate tax on patent IP income.   

The current rate of corporate tax can be discouraging for many research-oriented organisations who therefore chose to locate their IP abroad, where tax rates are lower.

Following the announcement, GlaxoSmithKline (GSK) stated that it would be investing £500million on a new biopharma facility, thus creating potentially 1000 new science graduate jobs.  In reference to the government’s proposals, Andrew Witty, Chief Executive of GSK, commented, “I guarantee you that if this hadn’t happened, there would be no GSK pharma facility being built in Britain.”