“HMRC offers financial reward to UK inventors and innovators”.
From 1st April 2013, UK companies are able to elect to enter the UK Patent Box and effectively reduce the rate of Corporation Tax paid on their qualifying profits to just 10%.
The Government aims to make the UK the most competitive tax regime in the G20 from 2013 and the Patent Box is a key piece of legislation designed to reward innovative UK companies through substantial tax relief on profits derived from the worldwide sales of their eligible products and services.
Whether you have an established trade or an entirely new product idea, the financial benefits from incorporating a qualifying patent are currently more attractive than ever.
A UK Patent or any patent granted via the European Patent Office could reduce tax on profits from 23% to potentially 10% (8.7% for small companies). With this headline figure, a company that has relevant IP profits of £500,000 could save £65,000 in Corporation Tax under the Patent Box regime.
Whilst the Corporation Tax benefit is only available when eligible patents are granted, tax relief can be backdated to the the date of patent application filing and companies also have up to 2 years following an accounting period end to elect into the Patent Box scheme.
Although the regulations are complex and HMRC qualification tests must be met, Disruptive Innovation can help client organisations of all sizes to understand the requirements for qualification and our innovation teams are skilled in identifying and developing “patentable” products and components that can lead to Patent Box qualification.
To find out how we can help you invent a novel product or component please contact our Leeds office.