What is Patent Box and how can it benefit your business?
Patent Box is a tax incentive, announced in The 2012 Budget, that allows companies to apply a reduced 10% corporation tax rate to profits attributed to patents and certain other similar types of intellectual property (supplementary protection certificates, regulatory data protection and plant variety rights).
Therefore, revenues from worldwide royalties, license fees, product sales and sales of patents that get taxed in the UK will all be allowable.
The definition of qualifying income under the Patent Box is generous. In particular, incorporating a patented item into a parent item can qualify the whole item. For example, a patented speedometer in a car would qualify the whole car.
Patent Box is available on profits arising on or after 01 April 2013, however we are finding many businesses still not planning on taking advantage of these significant tax breaks due to the complexity of the required documentation.
What qualifies for Patent Box?
You may be surprised to find that Patent Box is applicable to more companies than you first thought and the amount of savings in terms of a reduced tax liability could be significantly greater.
The key qualifying criteria is:
- You must have made a significant contribution to the creation or development of an item protected by a patent or a product incorporating this item.
- If your company licences its patent rights it must have exclusivity which is at least country-wide.
However, please contact us to discuss whether you could be eligible.
We can help with Patent Box claims
We are a west of London based firm of chartered accountants and tax advisers who are fast-moving and proactive in helping you to take advantage of available tax reliefs.
Why choose our Patent Box Service?
- In depth understanding of the legislation: we can tell you what IP counts, what income qualifies, how are expenses worked out, and what the claim is worth.
- Enhancing the claim: where can you secure further IP rights, how can you refine your business model to capture more qualifying income, where do the boundaries lie between what can be claimed and what cannot?
- In depth understanding of HMRC’s view: meaning we know how best to present a claim to HMRC and we can tell you which aspects of a claim will be accepted and which will be harder to get through, before you put the claim in.
- Seamless connectivity with R&D service: many clients able to make a Patent Box claim will be involved in R&D, and vice versa, and where that happens we can ensure that both aspects are maximised.
We can help you with Patent Box claims, R&D Tax Credits and make sure you are taking advantage of a whole range of other tax reliefs and exemptions available to you.
If you are in any doubt whether you qualify or are finding your claim very complicated, please do get in touch with our experienced tax team to find out how we can help.