Patent Box: December year end? You have until 31 December to elect for qualifying 2024 profits

If your company has a 31 December year end and generated profits from qualifying patented technology during 2024, there is an important deadline approaching.

Companies have two years after the end of the relevant accounting period to elect into Patent Box. This means that, for an accounting period ended 31 December 2024, the deadline to make an election is 31 December 2026.

If you have not considered Patent Box before, or have qualifying patents that were generating income during 2024 but were not included in a Patent Box claim, now is the time to review your position.

1 | The Patent Box election deadline

A company can elect into Patent Box within two years after the end of the accounting period in which the relevant profits arose, either through its tax computations or separately in writing. There is no specific Patent Box election form or CT600 box.

For companies that have not already elected into Patent Box, the latest election dates would therefore be:

If your business generated qualifying profits from patented technology during 2024 but did not elect into Patent Box, 31 December 2026 could therefore be your last opportunity to do so for that period.

2 | What about the IP generating income now?

And if patented IP is generating revenue in 2026, now is a good time to check that you are capturing the information needed for a future claim. You do not need to elect into Patent Box for your 2026 accounting period by 31 December 2026. However, the information needed to calculate a future Patent Box claim is being generated now.

Before your December 2026 year end, you should be asking:

»    Do we own or exclusively license qualifying patents?

»   Are patented products or processes generating income?
»   Can we identify the income attributable to qualifying IP?
»   Are the relevant R&D costs being tracked correctly?
»   Do our systems give us the information needed to calculate Patent Box profits?
»   Are there patentable innovations currently sitting unprotected?

3 | Why review your Patent Box position before year end?

Patent Box calculations require companies to track the relationship between qualifying IP income and R&D expenditure, so leaving that analysis until two years later can make the exercise considerably more difficult.

Reviewing your position earlier gives you the opportunity to identify which patents and income streams may qualify and check whether the necessary financial and R&D information is being recorded. HMRC’s Patent Box guidance contains specific R&D tracking and tracing rules.

For your December year-end company, these are the two points to consider before 31 December:

→ If qualifying patented technology generated profits during 2024, check whether you need to make a Patent Box election before the deadline.

→  If patented IP is generating income during 2026, check that you are capturing the information you will need to assess your Patent Box position later.

If you have any questions about whether your IP could qualify for Patent Box, the election deadline that applies to your business or the information needed to support a claim, get in touch with the ABGi team and we will be happy to help. If you are unsure whether your 2024 IP/profits qualify, the ABGi team can conduct a complimentary pre-screening review before the December deadline closes.