The aim of the Patent Box is to encourage companies to locate the high-value jobs associated with the development, manufacture and exploitation of patents in the UK, and maintain the UK’s position as a world leader in patented technologies. It intends to achieve its policy objectives by taxing the worldwide profits attributable to patents held by UK taxpaying companies at an effective rate of 10 per cent, rather than the 23 per cent corporate tax rate that will come into force in April 2013.

From the outset of the consultation period, HM Revenue & Customs and HM Treasury were clear that they wanted the new regime to be the finest it could be. HM Treasury has set aside almost £1 billion per annum to pay for the new relief, so it was important to get it right. The fact that the government officials were creating a brand new relief (as opposed to most consultations which involve revisiting well-established legislation), allowed all parties to keep an open-minded, discursive approach.

Deloitte wanted to play its part by encouraging open and honest discussions between government and tax payers. We decided to host an event in our innovative iZone, a space designed to encourage creative thinking, and invited the architects of the relief from HM Revenue & Customs and HM Treasury to attend, together with representatives from tax payers across all sectors, patent attorneys and Deloitte subject matter experts. We identified a long list of the issues that we felt were important to resolve, invited attendees to vote on which they thought were the most critical, and then devoted the rest of the day to debating the critical matters in depth.