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Patent Box

Technology businesses and manufacturers alike have eagerly awaited the commencement of the Patent Box regime, which started in April 2013. The regime offers a 10% corporation tax rate on profits generated from patents and could lead to significant tax savings.

Maximising the opportunity to gain benefit from this regime is not going to be straightforward.  HM Revenue & Customs identifies a number of key issues that need to be considered:

  • Patent ownership requirements – it is expected that many companies will seek to secure patents on innovations where they perhaps previously may not have bothered.  This may lead to backlogs at the Patent Office.  The sooner the application is made the better.
  • Calculation of claim – there is a structured approach to the calculation of the claim and this will mean that it is important that companies identify streams of income that arise from their patents.

The calculation of the claim is particularly complex for companies simultaneously claiming R&D tax credits and early planning will be required if maximum tax advantages are to be achieved.  For companies in both UK and International groups, it may be necessary to consider how IP is held and managed within the group to ensure tax savings are achieved.

Because of these complexities and the very real potential to gain benefit from Patent Box we are consulting with clients at an early stage to define appropriate strategies to ensure that they are making the most of the regime.

For more information, please click here.

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