Tax on profits from patents to be slashed

Government says move should help spur on innovation in the technology sector

The government today detailed its Corporate Tax Reform programme, which will include a commitment to introduce a "patent box", which experts said should have a significant impact on the IT industry.

The patent box will be introduced in April 2013 and will see corporation tax on profits from patents reduced to 10 per cent from 28 per cent.

In a release the government said: "This reaffirms the government's commitment to retain and build on the existing research & development (R&D) tax credit scheme to create the right environment for innovative companies to prosper."

In a statement in the Commons, chancellor George Osborne said: "This measure is aimed at increasing the incentives to innovate and develop new products in this country."