What is Patent Box?

Patenting your idea not only helps open a niche in the market and attract investment but can also provide further  benefits such as a reduction in the corporation tax applied to the profits  you earn from a patented idea, using the Patent Box scheme.

The Patent Box enables companies to apply a lower  rate (10%) of corporation tax to the profits earned from the patented inventions.

Is my patent  eligible?

Patent Box tax relief  in the UK is available to  companies which hold patents granted by the  UK Intellectual Property Office, European Patent Office, or one of several other patent offices within the

European Economic Area.

 To qualify, the research and development undertaken in the creation of the patented invention must have been performed in the UK by your company.

 

Eligible profits: IP Income

Patent Box tax relief is available for the income your company earns from exploiting the patented inventions. This relates to the profits derived from the sale of the patented product or products incorporating the patented invention. The tax relief is also available in connection with a manufacturing process that is patented or a service which exploits a patented tool. Patent license fees and income earned from patent infringement matters, in addition to the sale of patents themselves, are also potentially eligible for the tax relief.

 

How can I apply?

There is no special form  to complete  to apply for Patent Box corporation tax relief. The only requirement is to make your election in writing in the computations accompanying your company tax return. You must make your election within 2 years of the end of the accounting period in which the relevant profits and income arise.

 

For more information you can visit  www.gov.uk/guidance/corporation-tax-the-patent-box or come and have a chat with us.

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Ozgur

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