The Patent Box was introduced to encourage UK-based companies to innovate in the UK by offering a lower rate of corporation tax on profits related to patented technologies.
Under the Patent Box scheme, profits relating to patented technologies are taxed at 10% – as opposed to the standard corporation tax level. The eligibility requirements changed in July 2016 to focus the benefits on companies that have themselves borne a major proportion of the research and development (R&D) costs that have resulted in a patented invention.
Those who make good profit margins on innovative products, and who bear the R&D costs associated with developing the products, stand to make substantial tax savings.
If your company operates in the UK and invests in R&D then the Patent Box is designed for you and could substantially reduce your tax liability. It is a government incentive designed to reward innovative companies, in a similar way to the R&D tax credit schemes.
We have experience of helping innovative companies in sectors as diverse as luxury consumer electricals and high-volume printers reconfigure their patent strategy to enable them to make best use of the scheme. Our commercially minded team of attorneys is adept at identifying patentable innovations and securing protection for them in a manner that not only provides a competitive edge, but which also qualifies profits for the Patent Box.
We can show you how your company may benefit and work together with your financial advisors to ensure you pay an appropriate level of tax.
"Patent Box remains attractive for many companies."
"Obtaining patents that qualify for Patent Box need not be costly or onerous."