UK - Autumn Statement and IP tax

The devil will no doubt follow in the Finance Bill detail, but the heads up on IP tax points from the Chancellor's statement is:

Fiscal:
- the new (post-1 July 2016) patent box rules are to be updated by adding provisions to deal with cost sharing arrangements so that companies using these are not advantaged/disadvantaged when it comes to calculating the R&D fraction

- 'new spending' of £4.7 billion between 2017 and 2021 to enhance the UK’s position as a world leader in science and innovation (whatever that means …), apparently to be rolled out as £425m in 2017-18, £820m in 2018-19, £1.5bn in 2019-2020, and £2bn in 2020-2021. This is apparently direct funding (grants) into an Industry Strategy Challenge Fund, to be modelled on the USA's Defense Advanced Research Projects Agency programme, as well as allocating funding more generally.

- £0.7 billion to support the market to roll out full-fibre connections and future 5G communications

Non-fiscal:
- review tax environment for R&D to build on the R&D Expenditure Credit for large companies 'to make the UK an even more competitive place to do R&D'
- more Science & Innovation Audits

UK Spending Review & IP

Crickets - by Billy Hathorn

The UK Spending Review happened today – also known as the Autumn Statement – basically it's an update on the economic state of the nation in the UK and a staging post for economic, tax, etc announcements.

In past years, the Spending Review (or whatever it was known as in that particular year, the name changes) has brought us things like the patent box, R&D relief, and so on.

This year … crickets, from a tax perspective. Nothing much, really (a small change on entering into the intangibles tax regime for corporate partners).

There's some spending announcements though (with the usual caveat that it's a bit hard to tell what's new money and what's been announced before):

• £5bn in health R&D, including £50m in antimicrobial resistance research; 
• £150m to launch a Dementia Institute (presumably to do R&D);
• investing £6.9bn in capital (capital what?) to ensure that the UK remains a world leader in science and research, and protecting the current £4.7bn research funding "in real terms" for the same purpose - but note that £6.9bn includes the £150m for the Dementia Institute;
• investing £250m in a nuclear R&D programme (looks like it will be mostly for small modular reactor development, and focussed on spending in the North of England);
• protecting funding for the arts in real cash terms for 5 years;
• the £1bn Ross Fund investing in R&D in drugs, vaccines, diagnostics and treatments for infectious diseases – patterned with the Bill & Melinda Gates Foundation, so not all of that £1bn is coming out of UK pockets;
• playing a leading role in international research efforts to reduce the costs of low carbon energy (no £ information indicated, though);
• a new entity called "Research UK", based on the Paul Nurse review recommendations. This will work across (not with? maybe just poor wording …) the Research Councils to promote a strategic approach to science funding. Innovate UK will be integrated into Research UK. The Research Excellence Framework will be reviewed.

[ETA 26/11/15 – the Innovate UK grants are to be replaced by loans, according to a press release from BIS, which doesn't have more detail on the point]

The Review also notes that scientific R&D has grown by 21.3% and architecture and engineering activities by 38.8% (possibly since the beginning of 2010, although that's not entirely clear, and neither is it clear what metric they are measuring – employment numbers? capital expenditure? revenue expenditure?).

Stats for the curious: "research" is mentioned 46 times, "science" 35 times, and "technology" 30 times in the policy paper (PDF).