UK Budget & Intellectual Property
Funding Available for IP-Rich Businesses - In the budget the UK Chancellor offered something for IP businesses declaring that for there is to be consultation on a new tax relief for acquisition of IP rich businesses, and changes to the taxation of intangibles will take effect from Wednesday November 7th 2018.
As the ‘Banking on IP?’ report notes; SMEs’ first port of call for finance is often a bank. Figures quoted in the report show that 40% of SMEs seek a loan and 35% seek an overdraft. Only 1-2% of these businesses try to get equity funding. It is likely then that potential sources of funding are untapped. The Banking on IP response identified that one of the problems businesses faced was how they might identify financing options available to them. The Government seems to be listening too and doing something to support investment with the change to tax relief.
Knowledge Intensive EIS fund structure is to be launched.
This is an evolution of the Enterprise Investment Scheme (EIS) - designed to help smaller, higher-risk companies raise finance by offering tax relief on new shares in those companies that qualify. From an investor perspective, the big difference is that investors will be allowed to set their relief against income tax liabilities in the year before the fund closes. This is an advantage over the current approved EIS funds where the relief has to be set off against income in the same year that the fund closes.
Public IP: The government is also looking to get a better financial, economic and social return on its estimated £150 billion of intellectual property and other intangible assets in public ownership.