According to City AM, GSK intends to repatriate 150 R&D projects back to the UK as a result of the UK’s new Patent Box regime. This is excellent news for the UK economy and goes some way to defending the honour of the Patent Box regime, unfairly labelled as a tax avoidance measure by some.
However, in my view there was never any real doubt that firms like GSK would participate fully in the Patent Box and that it would result in increased economic activity in the UK. The real test of the relief will be the extent to which smaller businesses make use of it. If they do, I believe there will be longer term benefits to the economy as a whole. Yes, those companies will reduce their tax bill in the short term (as Parliament intended), but they will bring more innovative activity into the UK economy.
Let’s just hope that the silly political points scoring of some MPs, and the misleading reporting from the likes of the New Statesman, do not put off too many companies from utilising the Patent Box relief.