Businesses which generate income from patented inventions in the UK are able to enjoy a reduced rate of Corporate Tax thanks to the Patent Box system.

What is Patent Box?

One of the goals in the UK’s budget in 2011 was to encourage companies to “locate the high-value jobs associated with the development, manufacture and exploitation of patents in the UK, and maintain the UK’s position as a world leader in patented technologies”.

Since 2013, companies which own, exclusively licence, or undertook a qualifying development of patents granted by the UK Intellectual Property Office (UKIPO), the European Patent Office (EPO), or by certain other EU national patent authorities can pay reduced Corporate Tax related to them.

Companies only have to pay a 10% Corporate Tax rate on profits attributable to such patented products and processes rather than the usual 24%.

The broad range of definitions for ‘holding a patent’ under this rule mean that many businesses or innovators may qualify for the Patent Box’s reduced rate. If you would like to find out if you might benefit then contact us today.