Tax Bite: Patent Box

Companies who generate intellectual property and who patent their ideas may now be able to benefit from a lower rate of corporation tax under a new Government incentive.

Known as “Patent Box”, the regime offers a headline 10% tax rate on the profits generated from exploiting patented technologies. This compares favourably with the main rates of corporation tax of 20% and above.

Key features:

To qualify the company must:

  • Be liable to UK corporation tax and be generating income from patented products, processes or services.
  • Either own or exclusively license patents which have been granted by the UK/EU Patent Offices, or other EU approved authorities.
  • Be carrying out qualifying development of the ideas, or be involved in the active management of a group of companies which carries out the qualifying development.

If you have clients who fit the above criteria, or who are carrying out innovation but not currently patenting their ideas, then Patent Box could offer significant tax savings.

In order to maximise the relief specialist input is recommended as there are a complex set of rules and formulae which have to be followed. To find out more about how we can help speak to your usual FD contact.

Please click here for our flyer with more details.





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