In the Budget 2020 delivered today by the Chancellor of the Exchequer Rishi Sunak, the UK government has pledged to make a big financial investment and support businesses in a number of ways, including through tax incentives.

IP holders and their advisers will find some of the announcements relevant. Below we’ve picked out some of the interesting paragraphs from the Budget document, which is set out in two sections (section 1. Budget Report and section 2. Budget policy decisions).

Innovation, R&D and IP tax regime reform

The Budget recognises the value of IP, R&D and the knowledge economy, and therefore the government plans to “increase investment in science, innovation and technology to £22 billion by 2024-25”. The provisions for a green economy can be found at paragraphs 1.66 to 1.70 and 2.15 to 2.18.

The government also intends to make “the most of knowledge assets – The public sector holds around £150 billion of knowledge assets (intellectual property, tech, data and other intangibles)” and reform tax rules to make the UK an attractive jurisdiction for investing in R&D or data and owning/managing IP. The UK has an IP tax scheme (Patent Box) which can be used to reduce corporate tax (see here and here).

“Private investment will be crucial to meeting the government’s objective of increasing economy-wide investment in R&D to 2.4% of GDP by 2027, and to creating an innovation-intensive and technology-driven economy. The Budget will support and encourage this by increasing the rate of Research & Development Expenditure Credit from 12% to 13%. The government will also consult on whether qualifying R&D tax credit costs should include investments in data and cloud computing.”

Here is how the government will implement its IP tax plan: “[T]he government will legislate in Finance Bill 2020 to remove the pre-2002 exclusion from the Intangible Fixed Assets (IFA) regime to support UK investment in intellectual property and other intangible assets. This means tax relief for the cost of acquiring corporate intangible assets on or after 1 July 2020 will be provided under a single regime, subject to restrictions to prevent tax avoidance.”

There is also an ambition to support the UK life sciences sector. “In life sciences, the government will provide the British Business Bank with additional resources to launch a dedicated £200 million investment programme which is expected to enable £600 million of investment, helping to ensure the UK remains a world leader in life sciences innovation.”

Read more about the above provisions at paras. 1.61, 1.65, 2.22, 2.33, 2.34 and 2.36.

IP advice for entrepreneurs

It is good to see, perhaps thanks to the UK IPO, that the government also pledged to financially support IP advice. “[The government will] invest £13 million to expand the British Library’s network of Business and Intellectual Property Centres to 21 cities and 18 surrounding local library networks, providing entrepreneurs with business support, free access to market intelligence, IP workshops and one-to-one coaching.” Read more at paragraph 2.23.

Carrot and stick for the FMCG sector

FMCG and packaging companies should note the government’s plan to introduce a Plastic Packaging Tax regime in April 2022 and incentivise eco-friendly packaging. The document says: “The government will also go further to tackle the scourge of plastic waste by introducing a Plastic Packaging Tax, as well as providing further funding to encourage producers to make their packaging more recyclable.” Read more at paras 1.70 and 2.36.

Many brand owners in the FMCG sector are already conscious of the environmental issues over plastics. Considering the reaction to the plain packaging of tobacco products, it will be interesting to see how stakeholders will react to this new policy. The government has launched a consultation (see here).

You can find all the documents relating to the announcements here