Up to now, if you developed an innovative piece of software yourself and then set up a company to develop and sell, for example, a game, you could patent your software and licence it to the company. Any royalties you got would be tax free.
Clearly, this was a great incentive for innovators. However, it was abused with people patenting any process they could think of. As a result, it is being abolished. Is the baby being thrown out with the bathwater?
Under the old Business Expansion Scheme, people who invested in your business could get tax relief. Again this was valuable because, without the incentive, investors would be reluctant to put money into a high risk start up. It too was abused and needed revision. We’ll have to wait and see what the details of "BITES" are going to be.
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