Budget 2015: 'Evolution Not Revolution' For The Innovation Economy

IP Lawyer Comments On Chancellor’s Latest Measures


David Shirt, Press Officer | 0161 838 3094

The Chancellor yesterday introduced a series of new measures designed to help small and medium-sized enterprises and to stimulate the creative industries. Such measures include:

  • Increase in film tax relief to 25%;

  • New children’s television tax relief from April 2015;

  • New orchestra tax relief of 26% from April 2016;

  • An extra £4m of funding for the video gaming industry through a new Video Games Prototype Fund;

  • The Skills Investment Fund will be extended with £4m in match funding in order to provide training and development in the film, high-end TV, animation and video games industries;

  • Reviewing how the government can strengthen its funding into postgraduate research, and introducing income-contingent loans of up to £25,000 for PhD and Masters students;

  • Subject to state aid approval the Government will increase the cap on investment a company can receive under the Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCTs) scheme to £15m or £20m for knowledge intensive companies, and will increase the employee limit for these knowledge-intensive companies from 249 to 499;

  • £600m to enhance mobile broadband connectivity and an ambition to introduce ultrafast broadband to nearly all UK premises;

  • There will be a review of the availability of Entrepreneur’s Relief to academics who dispose of shares in spin out companies that use intellectual property to which they have contributed;

  • The Government is to implement a package of measures to improve the accessibility of R&D tax credits for smaller businesses.

Georgie Collins, Partner in our Intellectual Property in London at Irwin Mitchell, commented:

Expert Opinion
Being a pre-election budget the Chancellor focussed as much on the past as he did on the future, with much of his speech having an eye on the ballot box in 50 days’ time. Unfortunately there was little of fundamental importance for SME’s and innovative businesses to get excited (or incensed) about. However there was enough to signal that the government at least has the creative industries on its radar and the role they can play in a successful economy. Enhanced film and TV tax reliefs are a step in the right direction, and video games companies will be pleased that they are being recognised as a key creative industry, having lobbied the government for further support. The increase in the cap for investment by EIS and VCT schemes for knowledge intensive schemes and the pledge to improve R&D tax credits are also good news. The Patent Box was conspicuous by its absence will be left to a new government to decide its future.

“This Budget could be summed up as “evolution not revolution” for the innovation economy. All eyes will now be on the respective main parties’ election manifestos to see how they plan to encourage innovation and the creative economy in the UK.”
Georgie Collins, Partner