The Patent Box

Is any of your company’s income derived from a patented invention?

Does your company have any pending patent applications or plans to submit a patent application?

Is your company undertaking a Research & Development (R&D) project or has it already completed a successful R&D project?

This can also involve advising you whether a contract falls under the CIS scheme and which elements should have CIS tax deducted. We can also help you amend past CIS returns where required.

For limited company subcontractors, we can help you reclaim CIS tax you may have previously had deducted, including making the relevant Employer Payment Summary (EPS) submissions and corresponding with HMRC. We can help calculate CIS deducted for unincorporated subcontractors and include the relevant pages on your selfassessment tax return.

If you’ve answered yes to any of the above, you should consider the company’s current and future eligibility for the valuable Patent Box tax relief, accessing the effective 9% saving on certain Intellectual Property (IP) related profits.

It may be that applying for patents is not a part of your current R&D strategy, perhaps because of the complexity of the process and the limitations of the protection it offers. It still may be worth exploring whether a more straightforward application could be made for a smaller component of the invention to gain access to the Patent Box regime.

What is The Patent Box?

The Patent Box is a tax incentive designed to reward companies for driving innovation. Complementing the existing R&D tax relief schemes, it aims to encourage the development of new products and processes to boost economic growth in the UK. It is a generous innovation tax relief which reduces the Corporation Tax rate to 10% on profits derived from UK and EU patents and certain similar IP rights. The Corporation Tax rate currently at 19% translates into an effective 9% tax saving on the relevant IP profits.

It is never too early to start thinking about the Patent Box. Decisions made in the very early stages of the innovation cycle can affect the company’s eligibility for the Patent Box regime for the many years ahead.