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The Patent Box is a UK government scheme designed to encourage companies to keep and commercialise their intellectual property in the UK. Through this scheme, eligible businesses can apply a reduced Corporation Tax rate of 10% on profits from patented inventions, a significant cut from the standard 25% rate.
This benefit isn’t limited to patent owners; businesses holding exclusive licenses that meet certain conditions can also qualify.
Key Benefits of the Patent Box:
- Reduced tax on profits from patented products, technologies, royalties, and even damages from patent infringements.
- Encouragement for companies to keep innovative projects in the UK, supporting local investment and job growth.
- Long-term benefits, as the reduced tax rate can apply for up to 20 years over the life of the patent.
Case Study
A leading provider of vehicles and equipment, recently secured a patent for their core product range. The company, known for integrating smart technology and alternative energy, knew they couldn’t afford to miss out on this opportunity and asked for our help to make the most of the Patent Box scheme. Since electing into the Patent Box, they have seen real benefits in tax savings and are now working with Ian Farley R&D Tax Credits to evaluate their R&D expenditure credit, ensuring they’re prepared for new HMRC requirements.
Combining Patent Box and R&D Tax Relief
R&D tax relief offers deductions on R&D spending, while the Patent Box focuses on profits from patented innovations. Together, they create a strong support system for businesses engaged in R&D and commercialising new products, optimising a company’s tax position across the entire innovation cycle—from development to market success.
How Ian Farley R&D Tax Credits Can Support You:
Ian Farley R&D Tax Credits guides clients through the Patent Box process, offering:
- Assessments to check if your IP qualifies.
- Preparation of the necessary calculations and reports for Patent Box claims.
- Advice on managing R&D tax relief and Patent Box benefits to optimise benefits.
Our team ensures you understand each step, from checking eligibility to final submissions, making the process as straightforward as possible.
If you have any questions about the Patent Box or want to discuss how it could benefit your business, contact Ian Farley R&D tax credits. A representative will get back to you to discuss your specific needs and explain how we can help.
Contact us here for further information.
