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Business Tax: Developing and protecting IP, R&D

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Andrew England - Menzies Accountant

Andy England – Business Tax Partner

Successful businesses endeavour to distinguish themselves from competitors by identifying their differences and capitalising on them. Sometimes this is known as their USP (unique selling proposition). 

In developing the offering, businesses will often have developed some form of intellectual property specific to their business which sets them apart from competitors, whether it be a unique design; a new product; a special process; internal documentation; or a beneficial collaboration with another business. 

This intellectual property can be taken for granted but can be very valuable to a business and it is important to consider how this is protected and exploited for the long term benefit of the business. 

rocket success with audits

Intellectual property generated in developing a new product, process or branding is more instantly recognisable and straight forward to protect through use of trade marks, registered designs or patents but intellectual property can exist in less visible formats including within the minds of key employees meaning that securing their long term engagement, e.g. through share options, could be crucial. 

Early identification of potential intellectual property is not just beneficial for protection but also for considering available grants and exploiting the valuable tax reliefs that are on offer including the UK’s R & D scheme which allows SMEs to claim corporation tax relief on up to 230% of the qualifying costs and the Patent Box regime that reduces the corporation tax rate on qualifying profits. 

Consequently, effectively planning in relation to intellectual property can ensure that a group has the right structure and protections in place to secure the long term benefit of the intellectual property as well as being well positioned to exploit the immediate grants and tax reliefs available. 


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