The Patent Box regime is a generous tax incentive introduced in 2013 to encourage innovation in the UK.
The regime broadly offers an additional deduction in calculating taxable profits, with the effect that the relevant intellectual property profits are taxed at a reduced corporation tax rate of 10%.
Regardless of whether the patent product/process is the full, or part of the, component being sold, this regime allows you the possibility to qualify 100% of the profits deriving from the sale of the IP to be taxed at the reduced rate of 10%.
To qualify for Patent Box, a company liable to UK corporation tax must make profits from exploiting qualifying patented inventions.
The company must either own qualifying patents or hold exclusive licences for the rights to those patents, which must have been granted by the UK Intellectual Property Office, the European Patent Office or certain European patent offices.
The Patent Box rules are complex but with our specialists, we can ensure that the claimant qualifies for the Relief. Once confirmed, FI Specialists will conduct a smooth transition from the application process to the submission, up until the company receives its benefit.
We often work with clients on both R&D and Patent Box. We review ways that will maximise the company’s R&D tax credit relief as well as the increase the benefit the Patent Box.