Patent Box

Patent box advice page

What is the Patent Box?

The Patent Box provides a reduced rate of corporation tax for companies exploiting patented inventions or certain other innovations protected by particular intellectual property (IP) rights.

The Patent Box relief is one of the most generous tax incentives available to UK business, offering a 10% Corporation Tax rate on qualifying profits.

The reduced rate applies to a proportion of the profits derived from the licensing or sale of the patent rights or from the sale of the patented invention or products which incorporate the patented invention. Profits derived from routine manufacturing, development or exploitation of brands and marketing intangible assets are excluded.

The reduced rate of tax is given by providing an additional deduction in the corporation tax computation.

Patent Box Qualifying conditions

The regime came into effect from 1 April 2013 so it covers profits generated after 1 April 2013.

The company must be a qualifying company and own or hold a license for a UK or European patent.

There are two main conditions:

  • The company must have undertaken qualifying development by making a significant contribution to the creation or development of the item protected by the patent or a product incorporating this item; and
  • If the company holds a license in patent rights, the license must give it exclusivity for those rights. This must extend at least country-wide.

Get in touch with us to find out more about the patent box and to see whether your company could qualify.

R&D tax reliefs

With the government fully supporting innovative businesses, tax incentives are now potentially available from the costs of research and development through to the generation of profits, if the technology is patented.

Research & Development (R&D) tax reliefs are HMRC incentives created to encourage innovation and technological advances in the UK. R&D tax relief is a widely available, but often overlooked tax relief.

To claim this relief, you don’t have to work in a lab or wear a white coat.

We have submitted successful claims for IT & Software businesses, Food & Beverage businesses, as well as the more obvious Healthcare & Medical, Manufacturing and Engineering businesses.

Contact us for a free initial meeting

To find out more about how one of the leading firms of accountants in Sheffield, Doncaster and Northampton can help you, please contact one of our specialists. We believe in long-term client relationships and understand the importance of meeting to establish that you like us and we like you. This is why we offer all new clients a free initial meeting which will enable you to have a discussion about you and your business issues.

Free initial meeting

Stephen Charles

Tax Partner, Sheffield

Paul Wormald

Partner, Doncaster

David Cairns

Tax Partner, Northampton