Patent Box is a new regime designed to enhance the attractiveness of the UK tax system and to encourage investment in research and development within the UK. Effective from 1 April 2013 Patent Box will allow UK companies to pay a reduced rate of corporation tax on profits resulting from patented technology.
Eligible companies, who own qualifying patents granted by the UK Intellectual Property Office or the European Patent Office will be entitled to apply for a reduction in corporation tax to 10%; US patents will not qualify.
It is hoped that the financial benefits resulting from Patent Box relief may outweigh the cost of obtaining and maintaining patents. This is likely to change the approach taken by companies towards patents, and may mean that innovative companies consider seeking patent protection for their products or services where they may not otherwise have done so before.