Patent Box

If you run a business within the UK and have patented an invention, you may be able to claim a reduced rate of corporation tax on the profits you earn.

This is a tax relief known as Patent Box, and is suitable for businesses that use patented inventions or certain other innovations that are protected by intellectual property (IP) rights.


Is my business eligible for the Patent Box?

Your business will only be eligible to benefit from the Patent Box if it is liable for corporation tax and making a profit from using patented inventions. Your business must own, or have exclusively licenced-in the patents for the inventions, and you must have undertaken qualifying development on the patents.

Qualifying development means that your business must have created or developed the patented invention, or have developed a product that incorporates the patented invention.


How does the Patent Box work?

The reduced rate of corporation tax applies to the proportion of profits that are derived from the licensing or sale of the patent rights, the sale of the patented invention, or products which incorporate the patented invention.

Profits derived from routine manufacturing, development or exploitation of brands and marketing intangible assets are not eligible.

As such, for an accurate calculation of your finances, you will need to work out the percentage of your profits that come directly from the patented product or products in question. This will help you estimate how much less you could be paying in tax each year before applying for Patent Box.


How Edwards Accountants can help

The rules surrounding Patent Box are complex and daunting. As experienced chartered accountants based in Walsall, we assist businesses of all sizes with claims for Patent Box tax relief. Our extensive knowledge in the area means we are well positioned to advise on the best course of action for making a claim.

Not only this, but we can also provide a range of accountancy services to support your business, including assistance with the Seed Enterprise Investment Scheme (SEIS), business plans and forecasts and R&D tax credits.

To find out more about accountancy services in the West Midlands, please contact our team today.


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