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Are you aware of Patent Box Tax Relief?

Patent box is a powerful tax relief, widely under utilised and misunderstood.

30 Apr 2020

By Clair Dart

More so than ever, in the current circumstances, your business needs to maximise the tax relief available to it and reduce costs.

Patent box is a powerful tax relief, widely under utilised and misunderstood.

Companies which qualifying and elect into the patent box relief pay corporation tax at 10% on their trading profits from intellectual property (IP). The rate of tax is achieved by an additional deduction in calculating trading income.

As with all tax reliefs there are a number of conditions to be satisfied and there are detailed calculations to be carried out for the additional deduction.

IP rights which qualify:-

  • UK patents
  • European patents
  • Corresponding rights of specified EEA states
  • Supplementary protection certificates
  • Plant breeders’ rights
  • Community plant variety rights

For many businesses, the tax relief is not being claimed and they could be eligible. For even more, they could have been eligible, but action was not taken. Obtaining a simple patent could mean huge tax savings in years to come.

With the patent box, what is important is planning. Across all taxes, too many businesses seek tax relief after the fact, when it is too late to consider options available. Taking good earlier advice is key to achieve tax savings.

Please contact us.

if you would like to know more about patent box or other tax planning that we can help with.

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