Does your business profit from patented technologies? You may be able to reduce your Corporation Tax rate to only 10%.
Patent Box is a tax incentive program that cuts corporation tax to 10% on profits earned from patented products or the use of patented technologies.
The program encourages companies to invest in research and development by supporting the commercialization of new technologies.
This tax rate reduction applies to 100% of a company’s worldwide earnings from eligible IP income. With corporate tax set to rise from 19% to 25% for businesses earning over £250,000 on April 1, 2023, utilizing Patent Box has become increasingly crucial for good tax planning.
To make a successful Patent Box application, both technical and financial justification are necessary.
Our Patent Box department has the necessary expertise in both areas to prepare accurate and efficient claims. We will help identify specific revenue streams, evaluate each Intellectual Property right, consider the R&D involved, and guide you through the process of calculating final figures.
Our team of experts can handle the complex computations needed to determine qualifying profits for Patent Box tax relief, which were made even more complex with the improvements to the scheme in 2016. We recommend seeking expert counsel rather than going it alone. We offer a preliminary evaluation via booking a meeting with a member of our team. Consult with us to see how Patent Box can be a valuable tool for safeguarding your company’s future profits.
A business can take advantage of Patent Box if it earns profits from patents it owns or exclusively licenses and has invested in related “qualified development.”
To qualify, a UK-limited company making UK corporation tax payments must meet the following conditions:
To receive the relief, the company must make a formal election, which can be included in company tax computations and is valid until revoked.
The “relevant IP profits” eligible for Patent Box must be calculated through a 5-stage process:
Completing a Patent Box application can be a complex task, but at Bonham & Brook, we aim to make the process as smooth and stress-free as possible. Our team of tax specialists and technical experts will work closely with you to increase the chances of your application being accepted.