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The Patent Box incentive was introduced in phases, over the course of four years, in order to encourage UK businesses to commercialise intellectual property within the UK. The relief allows eligible companies to apply a lower rate of Corporation Tax (10%) to profits generated from its patented inventions.
When handling the Patent Box application alone, it can become quite a complicated process. However, with our Teams complete support, you can simply sit back, avoid the Corporation Tax increase, and reap the benefits your business shall acquire!
Patent Box claims are made by businesses in various different sectors!
In order for your business to benefit from The Patent Box incentive, your company must abide by the following:
In order for a Patent to be deemed eligible for Patent Box your company must own an exclusively licenced patent, granted by the following:
Austria, Bulgaria, Czech Republic, Denmark, Estonia, Finland, Germany, Hungary, Poland, Portugal, Romania, Slovakia, and Sweden.
Following the announcement in the 2021 Spring Budget… From the 1st of April 2023, the CT rate will increase up to 25% for companies with profits over £250,000. Therefore, Patent Box will become more important to UK businesses that are developing and exploiting patented inventions.
The Patent Box incentive can turn your innovative Business, unique thinking, and out of the box ideas into a potential tax saving, helping you to acquire the maximum profit available!
‘Why now?’ you may ask. Well, as of the 1st of April 2023, if your business generates more than £250,000 in profit, you are due to experience a significant change in your corporate tax rates, increasing from just 19% to 25%! However, we have the solution!
If you submit a claim for a Patent Box, you could significantly decrease the detrimental effects of the increase as the relief allows all eligible profits to receive a lower rate of Corporation Tax by an incredible 10%!
Contact a member of our Team to SAVE YOUR BUSINESS today…
This is a short meeting either via telephone or in person, in order to confirm that you are eligible for Patent Box.
This is to confirm our Terms and Conditions, NDA, and Data Protection Compliance. This is a simple form which is to be signed electronically.
This is to discuss which stage your Intellectual property (IP) is up to and where you are up to with submitting protection. We can then advise on projected benefits and elaborate on the necessary process to administer this until the patent has been granted.
We will make regular check ins with your accountant in order to ensure the necessary paperwork has been completed, each time you submit your yearend accounts.
This is where your claim, and all of the supporting evidence we have produced is submitted to HMRC for processing.
Once HMRC has granted the patent, you will then receive the benefit as discussed with Counting King.
Find Out How Much You Can Claim With Our FREE Research and Development (R&D) Tax Credits Calculator. You can even get the calculation emailed to you for future use.
The Patent Box scheme is administered by HMRC! Here’s an overview of their process for claiming the Patent Box:
Determine Eligibility: To be eligible for the Patent Box, a company must hold qualifying intellectual property (IP) rights, which include patents granted by the UK Intellectual Property Office, the European Patent Office, and certain other countries.
Calculate Qualifying Profits: Determine the profits attributable to the patented invention. This involves identifying income streams related to the patented product or process and apportioning the profits accordingly. It’s essential to maintain accurate records and separate the qualifying profits from the non-qualifying profits.
Complete The Company Tax Return: Report the qualifying profits and claim the Patent Box relief in the relevant sections of the company tax return. Provide the necessary details about the patents and their associated income.
Submit Documentation: HMRC may request additional documentation and evidence to support the claim, such as patent numbers, relevant calculations, and information about the qualifying development activities. These records substantiate the claim.
Review and Approval: HMRC will review the claim and supporting documentation. They may seek clarification or further information. Once satisfied, they will notify the company of the acceptance of the claim and the reduced rate of corporation tax that will apply.
Apply Reduced Tax Rate: Once the claim is approved, the company can benefit from the reduced rate of corporation tax on the qualifying profits generated from the patented invention.
The reduced rate of Corporation Tax applied to qualifying profits is not the only benefit of the Patent Box scheme. While the primary feature of the scheme is the lower tax rate, there are other potential benefits associated with the Patent Box incentive. These benefits include:
Contact us today to find out if you qualify for the Patent Box incentive!