The Patent Box is a Government scheme through HMRC that provides UK companies that hold qualifying IP rights or an exclusive IP license, and receive relevant IP income, the opportunity to benefit from a reduced rate of corporation tax on relevant profits.
From 1st April 2017 this rate is 10%.
Applied to company profits from eligible patents or other qualifying intellectual property rights such as :
- Patents granted by the intellectual property offices UK IPO and EPO;
- Patents granted by the national intellectual property office of 13 EEA countries;
- Medicinal & botanical IP rights (e.g. supplementary protection certificates);
- Exclusive licences for patented inventions developed, exploited and defended by the licensee;
- Patents acquired from another company, actively managed or developed by the acquiring company.
Profits will be calculated using revenue streams from global sales of:
- patented products;
- products incorporating one or more patented inventions;
- bespoke parts used in the patented product(s);
- licence fees, royalties or proceeds from the sale of the patent;
- Compensation/damages resulting from patent infringements
ABGI UK can assist in compiling and assessing associated costs and tracked profits from relevant patent protected products, and advise on:
- The implications of existing R&D eligible expenditure on calculation of relevant IP income;
- Managing corporation tax benefits of the combination of both R&D tax relief and Patent Box schemes;
- On-going legislative changes & impact on current or future patent box claims;
We will prepare the Patent Box report and associated calculation for inclusion in your tax return.