You’ve probably heard of R&D tax credits and may even have made claims. But have you come across Patent Box? Your business could benefit. Put very simply the Patent Box is a tax relief offered by the Government to companies who generate profits from patented technology.
In terms of the innovation lifecycle, R&D tax relief supports companies through the development phase, and the Patent Box benefits companies once the technology has been commercialised. The relief is in the form of a reduced rate of corporation tax of 10% (rather than the current rate of 19%) on profits arising from exploiting qualifying patents. Provided the company continues to generate profits from their patents, the relief can apply throughout the whole patent lifecycle, from application through to expiry (so up to 20 years) It’s easy to see that this can lead to a considerable cash saving to the company.
If you already have patents in your business
Talk to us to see if your company can benefit from the Patent Box. There are rules around the type of intellectual property which qualifies, but it’s definitely worth a chat to see if yours does. The relief applies for companies who either own or licence in intellectual property, and the patents could be over products which you sell or processes which you use. Income from licensing out patents which you own, or through delivering services which use patented technology, can also qualify.
“It’s not for us, we don’t have patents…”
Then it’s worth a chat with a patent attorney, particularly if you’ve never thought about patents, or haven’t considered it for a while. After all, if you have invested or are investing significant resource in R&D, you should be considering whether your developments should be protected. As well as the commercial benefits arising from patenting your technology, the tax benefits over the life of the patent can be significant, often far outweighing the costs associated with applying for and maintaining patents.
What next?
If your company uses patents anywhere within the business, or even if you don’t yet have any patents but would like to find out more about the associated commercial and tax benefits, then get in touch with [email protected] to see how the Patent Box could start generating significant savings for you.