Innovative tax breaks will encourage creativity

Scotland has generated some of the world’s greatest inventions. The telephone, penicillin and literature’s most famous boy wizard owe their existence to Scottish ingenuity. From 1 April, new research and development (R&D) legislation is set to continue this tradition of creative excellence.

Currently, patentable products or processes are taxed at 24 per cent. This is to change with a new favourable rate of 10 per cent set to revolutionise the way firms in Scotland operate and do business. The Patent Box initiative will not only encourage businesses in Scotland to develop new technologies, but the lower rate will give significant leverage around the world.

Patent Box could position Scotland as a R&D innovator. Slower R&D processes in other countries, such as the US, could encourage big name firms to bring their R&D departments to Scotland. Our dynamism in the burgeoning oil and gas sector, thriving IT and software sphere and focus on banking, finance and property management makes Scotland an attractive investment prospect.

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For some, Patent Box could indicate a double tax break. The regime is an attractive prospect to those developing intellectual property and capitalising upon registered patents.

These tax incentives are overdue. For some businesses, these alterations have come too late with a sizeable amount of business already lost due to unforgiving rates. Despite this, Scotland is well positioned for the future. Smart thinking and originality are a winning combination and when applied with conviction, Scotland has the potential to be a world centre for R&D merit.

With a wealth of talent and cross-sector creativity upon our doorstep, Scotland can look forward to worldwide business success unconstrained by taxation barriers.

By freeing up capital for progress, Scotland’s firms and variant sectors will benefit considerably. I foresee a healthier economy as a result of Scottish inventions continuing to demonstrate their prowess on an international scale.

• Ian Williams is chairman of Scottish accountants Campbell Dallas LLP.