GlaxoSmithKline welcomes plans for ‘patent box’

GlaxoSmithKline (GSK) has announced plans to invest £500 million in new manufacturing projects after the government pledged support for the "patent box" tax reform.

Designed to encourage investment in research and development, the proposal will see a reduction in the rate of corporation tax on profits generated from UK-owned intellectual property, such as patents.

The plan was welcomed by GSK chief executive Andrew Witty, who described it as "a bold and forward-thinking measure" from the government.

He added that the patent box "has the potential to transform the way in which the UK is viewed by companies such as GSK as a location for new investments".

As a result of the measure, the pharmaceutical giant said it will push ahead with plans to expand its respiratory drug development plant at Ware in Hertfordshire, as well as launching a £50 million venture capital fund to invest in fledgling healthcare companies.

GSK is also set to conduct a feasibility study on the location of a new biopharmaceutical manufacturing facility, with sites in Scotland and northern England currently under consideration.

The company said such projects will create an estimated 1,000 new jobs.