We ask Sandy Findlay, Partnership Director at Innovation Funding specialists ABGI-UK, a Make UK Advantages Partner, to give us insights on how to make the most of the Patent Box for your business.
So what is Patent Box?
Patent Box is a government scheme that gives companies the opportunity to pay a reduced corporation tax on all the profits arising from the commercialisation of a patent registered with the UK intellectual property office or the EU patent office. The aim of the scheme is to encourage UK based companies to invest in R&D and innovation and to commercialise on the resulting IP and maintain the resulting profits in the UK.
The scheme gives companies a preferential corporation tax rate on ALL profits associated with the commercial exploitation of a patented invention. Those profits can come from the sale of the patented product itself, the sale of a larger product which incorporates the patent technology, the sale of licenses and associated royalties or even fines and damages paid as a result of someone infringing your patent!
Is it only for companies with patents?
- If you hold an exclusive license and have responsibility for undertaking qualifying development work, maintaining and commercialising on the IP; or
- If you hold medicinal or botanical rights;
- Then you can take advantage of the preferential corporation tax rates offered through Patent Box.
How much benefit can I expect to receive?
What if we deliver a service using patented technology?
Yes, you can still take advantage of Patent Box, although calculating the IP derived income can be a little more complicated with services than physical products, but the benefit is still 10% corporation tax on all associated profits.
We only have a patent pending, can we still apply for Patent Box?
Can a company claim both R&D tax relief and Patent Box?
Is it possible to make a Patent Box loss?
ABGI is a global consultancy with over 30 years' experience helping some of the world's best known brands accelerate innovation and business expansion by capitalising on their R&D activities, in compliance with all rules and regulations. They have extensive experience helping companies leverage valuable funding back into their business through government-backed incentives such as grant funding, R&D tax relief, Capital allowances or Patent Box.