Patent Box Relief
how much you could receive
Patent Box
Everything you need to know
The Patent Box incentive was introduced over four years (2013-2017) in phases to encourage UK businesses to commercialise intellectual property within the UK. The patent box relief allows eligible companies to apply a lower rate of Corporation Tax (10%) to profits generated from its patented inventions.
Who can benefit from Patent Box Relief
In order for your company to qualify for Patent Box, you must meet certain eligibility criteria:
- Your company will need to be profitable from exploiting of patented invention(s)
- The company is liable to Corporation Tax.
- The company has undertaken qualifying development on the patented invention(s).
- The company must own or have the exclusive licence of the patented invention(s).
- The company has elected for Patent Box (via computations accompanying a CT Return or separately in writing), within 2 years of the accounting period in which the relevant profit and income arose.
What makes a patent eligible for Patent Box
In order for your company to benefit from the Patent Box, your company must own or exclusively licence in patents granted by:
- The UK Intellectual Property Office.
- The European Patent Office.
- These countries in the European Economic Area: Austria, Bulgaria, Czech Republic, Denmark, Estonia, Finland, Germany, Hungary, Poland, Portugal, Romania, Slovakia, Sweden
Following the announcement in the 2021 Spring Budget that from 1st April 2023 the CT rate will increase up to 25% for companies with profits over £250,000, the Patent Box will become more important to UK businesses developing and exploiting patented inventions.
How can Churchill Tax help?
Churchill Tax can assess your existing IP portfolio to identify whether there are patented inventions (products or processes) that would qualify for Patent Box. Following the identification of eligible inventions, we will work with your accountant to stream the income and costs relating to each of the qualifying patented inventions. Furthermore, we will then proactively advise on the future streaming and tracking required to continue to benefit from the Patent Box.
- Identify: Encouraging companies to create and commercialise more Intellectual Property within the UK.
- Patented Licence: Once your patent application has been successful, you will be able to claim a lower tax rate on profits generated from exploiting your patented inventions.
- Lower Rate: Pay the lower 10% Corporation tax on profits generated from exploited patented inventions.
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BOOK A CONSULTATION
Churchill Tax provides all types of tax advice on complex issues to individuals and companies across all sectors. We make the time and effort to understand our client’s businesses and needs and our tax experts have a proactive and flexible approach to helping clients overcoming the challenges they face.