With effect from 5 December 2012, income tax relief is abolished for payments of patent royalties that are not deductible in computing income from any source. The measure is designed to counter known avoidance arrangements exploiting this relief and to simplify the tax code.

Previously, under sections 448 and 449 of the Income Tax Act 2007 (ITA 2007), payments of patent royalties by individuals and other persons were deductible against other income of the same year. The relief applied only to payments that were not deducted in calculating income tax liability from any source (for example, a trade). Legislation will be introduced in the Finance Bill 2013 (amending sections 448 and 449 of the ITA 2007) to abolish the relief for payments of patent royalties by individuals and other persons, such as trustees, personal representatives and non-resident companies within the charge to income tax. The change will have effect for payments made on or after 5 December 2012.

(See HMRC: Autumn Statement - 5 December 2012, Anti Avoidance and Evasion, Tax information and impact note: Abolition of income tax relief for patent royalties and HM Treasury: Autumn Statement 2012, paragraph 2.112).

The government has confirmed that it will introduce corporation tax reliefs for each of the following industries:

The government has also announced that it will offer a payable tax credit for each of the three reliefs of 25% of qualifying expenditure.

The reliefs were first announced as part of the 2012 Budget and the government held a consultation over summer 2012. For further detail, see Tax legislation tracker: intellectual property: Corporation tax relief for creative sector.

The reliefs will have effect from April 2013 and are subject to EU state aid approval.

(See HM Treasury: 2012 Autumn Statement, paragraphs 1.133 and 2.73.)

The government has confirmed that it is providing support for innovative business through the tax system by introducing an "above the line" credit for R&D in 2013, as previously announced in the 2011 Autumn Statement (see Legal updates, Consultation on "above the line" R&D credit and 2011 Autumn Statement: implications for IP, IT and communications: R&D "above-the-line" tax credit). Further details on the design of the credit will be announced shortly.

(See HM Treasury: Autumn Statement 2012, paragraph 1.95.)

The government has accounted for receipts of £3.5 billion from the sale of spectrum suitable for 4G mobile, which is scheduled to take place early in 2013.