The aim is to encourage the development of new patented inventions in the UK. If your company is making a profit on your patented inventions, you will be eligible for a lower effective corporation tax rate of 10% on your relevant profits.
The Patent Box Relief scheme applies to all types of business and industry sectors.
The scheme came into force in April 2013 to worldwide profits from the UK and EU patents, where a business owns the patent or has exclusive licence over it. You can even claim for profits that arise before a patent is granted.
A Patent Box claim is worth 10 times the average R&D claim but only 1.6% of R&D claimants are filing Patent Box claims.
The average value of a Patent Box claim is just under £900k for large businesses.
1405 Companies claimed Patent Box relief
£1,129m benefit claimed
Average claim size is £84k for SMEs
28% of claiming companies are large companies
*Figures from HMRC during the 2018 – 2019 period.
The Patent Box scheme is for businesses who generate profit from patented products or processes. A qualifying company is one which is subject to corporation tax, and which owns, or exclusively licences, qualifying IP. This means that a business must meet strict qualifying criteria to be able to make a claim.
If the business has yet to licence a patent, but is considering applying for one, then you need to talk with us to discuss your options.
If you are eligible for the Patent Box Tax Relief, it is likely that you are also eligible for R&D Tax Relief.
HMRC accepts many types of patents, including any patents granted by:
A company qualifying for the Patent Box will effectively pay a blended rate of CT between 10% and 19%.
This is because the Patent Box Tax Relief affords a 10% rate of CT to the additional profits deemed to arise as a result of holding the patent. There is a detailed, methodical series of steps set out by the legislation to derive these profits (these can be provided upon request).
We have assisted and advised hundreds of businesses on their Patent Box Tax Relief. Our initial consultation is free, and we will let you know if you have the basis of a claim. If you are eligible for the Patent Box Tax Relief, it is likely that you are also eligible for R&D Tax Relief which we also assist and advise on. Our team of experts are here to help, simply submit your details to start the process.
It doesn’t cost anything to make a claim with Patent Refunds. The pre-qualification with our chosen tax partner is free and the fees for submitting a claim will be based on tax savings. Therefore, the net cost is always a saving. Each business is assessed on its own merits.
Complete the Patent Box Eligibility Check form to see if you can benefit from unclaimed tax relief.