A tax incentive designed to boost UK innovation has been welcomed by a top accountant in Cambridge.

The move forms part of the Government’s draft legislation concerning Patent Box, a tax incentive aimed to encourage companies to locate their innovative activities and functions within the UK rather than relocating overseas.

Richard Blackwell, tax partner at Deloitte in Cambridge, said current incentives were worth billions and “the scale of the opportunity is clear for all to see.”

Blackwell; said: “The UK has historically been a popular choice for companies wishing to develop their intellectual property.  This choice has recently been further encouraged by the Research & Development (R & D) tax credits.

“However, when it comes to the exploitation of the IP for commercial purposes, the UK has often lost out to other, lower tax jurisdictions.

“From today’s draft legislation, we can see Patent Box is shaping up to be an effective incentive to retain IP in the UK. The combination of a very positive Patent Box regime, with a potentially improved R & D tax system, makes the UK a competitive jurisdiction for the whole innovation lifecycle.

“This could result in an increase of technological activity and also persuade companies to keep or add high value jobs in product commercialisation.

“During 2012, companies should consider the implications of Patent Box and the expected one on the 'above the line' R & D tax credit regime.

“Together, these incentives could usher in a unique benefit for companies from conception of the idea, through to feasibility testing, manufacture and commercialisation, all rewarded generously. These two incentives are worth about £2billion – so the scale of the opportunity is clear for all to see.”

• PHOTOGRAPH SHOWS: Richard Blackwell, tax partner at Deloitte in Cambridge