The Patent Box allows companies the opportunity to enjoy a lower rate of Corporation Tax to profits earned after the 1st of April 2013 form its patented inventions.
There are permutations of course, which dictate which companies are able to benefit from The Patent Box. To lend a hand, Kene Partners has created this article to help you understand the legislation and discover the transformative effect of working with an esteemed consultancy as our own.
The Patent Box program was launched by the government to encourage and support businesses that were dedicated to investing in research and development (R&D).
It was agreed in the Houses of Parliament that it was critical that such companies should be given every opportunity to innovate and commercialise their patents as the UK economy relies heavily on its exports of world-class products across a multitude of sectors.
The move has proved to be a huge success, with businesses unlocking the power of their patents with the support of consultancies such as Kene Partners.
What does it mean for you?
If your business qualifies, the scheme will provide an effective Corporation Tax rate of 10% on income gained from the commercial activation of patents. The introduction of the program has been staggered since it was launched in 2013 and it is now in full swing as full relief on all Patent Box profits are accessible. Therefore, if your business qualifies, we will be able to launch a full application on your behalf.
How do you know whether you qualify for submission to The Patent Box?
If your business owns patent licenses in Intellectual Property (IP) rights or gives exclusivity to the licences of those patents which it has carried out R&D on, it will qualify for The Patent Box.
Your business may also benefit if it is part of a group and we would be happy to discuss the permutations if you aren’t sure whether you qualify. Simply get in touch for a no-obligation consultation.
Processing the application
So now that you know what the Patent Box is and whether your business qualifies or not, it’s time to discuss how an application is processed. The complexities around determining the exact Patent Box tax relief have grown as the scheme has developed. Therefore it is important that you have a trusted council to execute the application.
The Government took an intelligent step by introducing regulatory updates to the legislation in order to prevent abuse of the Patent Box in 2016, highlighting once more that it is critical that you work with an establishment with the expertise, understanding and diligence to ensure your business gets the money it is owed.