As from 1 April 2013, companies can start to benefit from the reduced rate of UK corporation tax (CT) on profits derived from the sales of patented inventions, and patent licence income. Further information is available in our IP Update No. 173 on this website.
However, in brief:
- The CT on qualifying profits will come down in stages from the normal 24% to 10%.
- The patent can be an existing one.
- Retrospective relief will also be available for the period in which a patent application is pending.
- Worldwide profits can benefit, even though only a UK patent is needed.
- The profits from the sales of the whole product can qualify, even if only a part of the product is patented.
- If benefiting from the Patent Box is the main reason for applying for a patent, the costs of doing so should be significantly lower than usual, and should be outweighed by the tax savings.
- We, together with some accountants with whom we have teamed up, can advise you further on
- what products (and processes) might be eligible,
- what to patent if you don't already have the right patents,
- what the relief might amount to, and
- how to claim the relief.