PHARMACEUTICALS GIANT GlaxoSmithKline (GSK) is set to relocate hundreds of projects back to the UK in order to take advantage of the government’s Patent Box scheme on intellectual property.
In a move that will be seen as a significant boost to the UK, the country’s biggest drug maker will repatriate 150 overseas research projects to the UK, following April’s introduction of the Patent Box regime, City AM reports.
Introduced in the 2011 Budget, the rules see profits generated through British-based intellectual property are taxed at a lower rate of 10%, instead of the typical corporation tax level, which currently stands at 23%.
The news comes more than a year after chief executive Sir Andrew Witty announced plans for a new UK factory – the first in 40 years, part of £500m to be spent as a result of the Patent Box.
“The patent box has changed how we view the UK as an investment prospect,” GSK said at the time.
It is expected that while the corporate tax rate is lower, GSK will contribute more to the public purse as a result of relocating the projects to British shores.
It news will be seen as a feather in the chancellor’s cap after he declared his tax policies will ensure Britain “open for business” with the “most competitive tax system in the G20”.
WPP made a similar move in 2012 after a four-year self-imposed tax exile, returning its headquarters to London from Dublin, as a result of a change in legislation relating to foreign profits.
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