What is the Patent Box?
Patent Box is a corporate tax relief that provides for an effective corporation tax rate of 10% on profits arising from patented technology. With corporation tax rates rising to 25% from April 2023, Patent Box can potentially generate substantial tax savings. The relief is wide ranging and applies equally to profits from the sale of products that incorporate a patent, patent license income and profits attributable to a patented process.
For patented products, the relief applies to UK company profits arising from worldwide product sales, even if the patent only relates to a single aspect of the overall product.
With Corporation Tax rising to 25% in 2023, it is now more important than ever to consider whether your business can benefit from a reduced rate of 10% under the Patent Box regime.
Michael Heinicke
FCA CTA
Does my company qualify?
A company needs to have ownership of, or have an exclusive license over, a patent which has been granted by the UK Intellectual Property Office (IPO), the European Patent Office (EPO), or the patent office of a specified EEA country.
Don't have Patents?
The patenting process can often be more straightforward than many companies realise. We regularly work with a number of patent attorneys to make patent applications on behalf of our clients.
If your company has a product that generates significant revenue, or a process that adds additional value or creates efficiencies, an exploratory discussion will be worthwhile.
When can I claim?
A company needs to elect into the Patent Box regime within two years from the end of the period for which the company wishes Patent Box to apply.
Whilst Patent Box relief can’t be claimed until a patent has been granted, it is possible to elect into the regime during the patent pending period – this enables tax relief to be accrued in the period between application and grant, with the relief given in the period that the patent is granted.