Patent Box Relief Specialists

What is Patent Box Tax Relief

Patent Box is a UK Corporation Tax relief that can reduce the tax rate on qualifying profits to an effective 10% where the profit comes from the sale of patented products or processes.

What Patent Box means for your business

For your business, that can mean paying less tax on profits linked to patented products, processes and other qualifying IP income. Your company must hold qualifying IP rights or an exclusive licence, meet the development condition and make a valid election.

We review how your patents support revenue, identify which profits may qualify, and show you where Patent Box is worth pursuing and how to apply it correctly.

Who Patent Box Is For

Businesses with patents, exclusive rights to patented technology, or products/processes incorporating patented innovation. In practice, your company is more likely to fit the rules where it owns or exclusively licenses qualifying rights, has played a real part in developing the innovation, and now earns profits from using that IP in the business.

Qualifying IP Right Holders

Companies holding qualifying patents, or certain rights similar to patents, including some rights used in life sciences and plant innovation.

Exclusive Licensees

Companies with exclusive rights to exploit patented technology in a defined territory or field of use, not just rights to distribute or resell it.

Developing Innovators

Companies that created the invention or made a significant contribution to developing the invention, a product incorporating it, or a process using it.

Commercial IP Businesses

Companies earning profits from patented products, licensing arrangements, patented processes, patented tools or other qualifying IP income streams.

R&D & Patent Box

Already claiming R&D tax relief?

If your business is developing innovative products, processes or technology, Patent Box may be the natural next step once that innovation is protected and generating commercial value. Many businesses focus on R&D relief during development but overlook the potential tax benefit available when patented innovation starts producing profits. We can review your R&D activity, IP position and revenue streams together to identify whether there is a Patent Box opportunity worth pursuing.

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Criteria

Qualifying for Patent Box relief

Patent Box eligibility depends on more than patent ownership. Your company needs the right UK tax status, the right type of qualifying IP right, qualifying development behind the innovation and profits that arise from exploiting that protected innovation.

Eligibility Conditions

Company within the charge to UK Corporation tax
Ownership of qualifying IP rights or an exclusive licence over them
Qualifying development carried out by your company or, where relevant, another group company

Other Qualifying IP Rights

UKIPO patents
EPO patents
Patents granted in specified EEA jurisdictions

Key Requirement

Your company must do more than hold IP on paper. Patent Box works where qualifying rights, development activity and relevant IP profits can be linked clearly under HMRC rules.

Qualifying for Patent Box

What Income Can Qualify Under Patent Box

Patent Box can apply to income that comes directly from qualifying IP rights and, in some cases, to income where patented value is built into the way your business makes, uses or licenses innovation. The key question is not only whether your company holds qualifying rights, but how that protected innovation translates into revenue. Relevant IP income is wider than many businesses expect. Speak to our specialists to check which income streams in your business may support a Patent Box claim.

Sales of Patented Products

Sales income can qualify where your company sells patented items or products that incorporate the patented invention.

Licence Fees and Royalties

Licence income can qualify where your company grants rights over qualifying IP, and some related rights can also fall within the calculation when they are licensed for the same commercial purpose.

Disposal Proceeds

Income from selling or otherwise disposing of a qualifying IP right, or an exclusive licence over it, can fall within Patent Box.

Infringement and Compensation

Damages, insurance proceeds and other compensation can qualify where they relate to infringement of qualifying rights or replace income that would otherwise have been relevant IP income.

Notional Royalty Income

Patent Box can also apply where patented value is embedded in a process, tool, service or leased asset and the income is identified through a notional royalty calculation rather than direct sales or licence fees.

Examples

Patent Box in real life

Patent Box outcomes depend on the amount of relevant IP profits, your company’s applicable Corporation Tax rate and the Patent Box calculation itself. These examples show the type of commercial effect businesses review when deciding whether Patent Box is worth pursuing.

Benefit Area	Operational Impact	Financial Impact	Time Horizon
Reduced Corporation Tax	Tax rate on qualifying IP profits drops from 25% to 10%	15% rate reduction on eligible income	From the point of patents are granted
Long-Term Tax Efficiency	Recurring benefit as long as patents remain in force and profits continue	Compounding savings over 10–20 year patent lifespan	Multi-year, structurally embedded
IP Value Optimisation	Encourages companies to attribute commercial value correctly to IP assets	Unlocks tax efficiency on IP income previously under-utilised	Medium to long-term, with retrospective potential
Predictable Ongoing Savings	Once elected, the regime provides a consistent, forecastable tax position	Supports financial planning and investor reporting	Annual, ongoing whilst election maintained

Estimate Your Patent Box Tax Saving

How the Patent Box saving is calculated

Identify qualifying IP income

We establish which revenue streams relate to qualifying patents and IP.

Determine the qualifying profit

We identify the profits attributable to those income streams under the Patent Box rules.

Apply the Patent Box adjustments

The legislation includes several adjustments that determine the final qualifying amount.

Calculate the tax saving

Qualifying Patent Box profits can benefit from an effective 10% Corporation Tax rate.

Meet Our Team

Dedicated Patent Box specialist

Vishal Patel

Head of Financial Consultants

Vishal is the Head of Financial Consultants with vast experience in R&D tax relief and Patent Box Relief. He has 10+ years in Consultancy and R&D Tax Relief working on some of the most complex R&D claims in the UK. He manages the Financial Consultancy Team working with and delivering the entire R&D portfolio. His main responsibilities include building and developing the Financial Claim Process and guiding the team with claim preparation, methodology and interviewing of clients. Outside of work he enjoys cooking, watching sports and reading.

Patent Box

Compliance & Ongoing Support

Patent Box work does not end once the opportunity is identified. B&B helps your company make the election on time, keep the yearly calculation accurate and maintain the records needed if HMRC reviews the position.

Election and Filing Support

We help your company make the Patent Box election within the required time limit and carry the claim through the Corporation Tax computation and return process.

Annual Calculation Support

We review changes in IP rights, income streams and calculation inputs each year so the Patent Box position continues to reflect the way your business actually earns profit from protected innovation.

HMRC Review Support

We help organise the supporting analysis and records so your company can explain the qualifying rights, development history and calculation basis clearly if HMRC asks questions.

The BB Method

Our proven process

Patent Box works best when qualifying rights, development history, relevant IP income and the tax calculation are reviewed in the right order. Our process is designed to test the opportunity early, build the calculation on the right facts and take the claim through to a supportable filing position.

Eligibility and IP Rights Review

We confirm whether your company, IP rights and development history fit the Patent Box rules

Step 01

Relevant IP Income Mapping

We review how patented innovation drives sales, licensing, disposals or other qualifying income streams.

Step 02

Patent Box Calculation

We work through the Patent Box deduction, including streaming and other adjustments where required.

Step 03

Election, Filing and Support

We help put the election, calculation and supporting records into a filing position that can be maintained over time.

Step 04

Why Us

Why Bonham & Brook

Specialist-led advice, tailored to your business.

Unparalleled expertise

Our team is made up of specialists who are genuinely the best in their field: people who’ve spent years mastering their discipline. That depth means our advice holds up under scrutiny.

Human-centred approach

We build partnerships that last. We integrate with your team, understand your business, and stay commited through the complex moments. That’s earned us clients who come back, year after year.

Ethical Foundation

Compliance is at the core of everything we do. It’s the foundation of how we think and advise. With a stellar in-house compliance team, you can be certain that every recommendation we make is defensible.

Trusted by the best

Leading organisations across industries trust us with their most complex challenges. That reputation is earned through consistent excellence and personable service synonymous with Bonham & Brook.

Patent Box

Patent Box FAQs

Can Patent Box apply before a patent is granted?

Patent Box benefit is usually given once the qualifying right has been granted, but your company can elect into the regime earlier. In the year of grant, earlier relevant IP profits from the patent pending period can be brought into the Patent Box computation. Earlier returns are not reopened.

Does every part of a product need to be patented for sales to qualify?

No. Sales can still qualify where the product incorporates the patented invention, even if the whole product is not itself patented. In some cases, bespoke parts designed to be incorporated into a qualifying item can also fall within the sales income rules.

Can acquired IP still qualify for Patent Box?

Acquired qualifying IP rights or exclusive licences can fall within Patent Box, but acquisition on its own is not enough. Your company, or another relevant group company, still needs to meet the qualifying development condition, and acquisition costs can affect the R&D fraction in the calculation.

Do you need to claim R&D tax relief to use the Patent Box?

No. A company does not need to have made an R&D tax relief claim to use the Patent Box. However, relevant R&D expenditure still matters because it feeds into the R&D fraction, so the underlying costs need to be identified and tracked correctly.

Can overseas sales qualify for Patent Box?

Yes, they can. Where your company sells a qualifying item or a product incorporating it, worldwide sales can still fall within Head 1 sales income even if the qualifying IP right only protects certain territories. The company still needs to hold the qualifying right or exclusive licence at the time the income arises.

What happens if your company has relevant IP losses?

A relevant IP loss means there is no Patent Box deduction for that period. The loss can then restrict future Patent Box benefits and, in some group situations, can also reduce relevant IP profits elsewhere in the group.

Can patented software qualify for Patent Box?

Patented software can qualify where the invention itself is patentable and the patent covers the software or the technical functionality it performs. Devices or systems incorporating that patented software can also qualify in some cases, and an exclusive licence over the patented technology may qualify as well.

Check Your Patent Box Eligibility

Speak with a specialist to confirm whether your company may qualify for Patent Box, review which IP rights and income streams may fall within the rules, and understand the next steps for a supportable claim.

Book a Consultation

Patent Box Relief for UK Innovators