If you pay UK corporation tax, there are a number of schemes that the Government has introduced to encourage innovation.

Patent Box

The “Patent Box” tax relief scheme that enables companies to apply a lower rate of UK corporation tax to profits earned from exploiting patented inventions.  The relief means that an effective rate of 10% will be payable on the relevant profits.

To qualify for the relief, you have to own or exclusively license-in the patents and you must have undertaken qualifying development of the invention.

The patents which apply are those which are in force in the UK (granted by the UK Intellectual Property Office or the European Patent Office, so long as the UK is a designated state); or those granted by a selection of other European countries which carry out examination processes which are of a similar standard to those carried out in the UK.

It is for your accountant to advise on the quantum of benefit which can be provided by this relief, but we are experienced on advising on how to optimise your IP strategy to take account of the relief; and we can provide technical input on how to map patents to products.

You can obtain some more information on the Patent Box at the UK Government website, or contact us for more advice.

R&D Tax Relief

R&D relief supports companies that work on innovative projects in science and technology. It can be claimed by a range of companies that seek to research or develop an advance in their field. It can even be claimed on unsuccessful projects.

In our experience, companies tend to overestimate what is required to qualify as research and development, and so this is something that should be considered.

We are not accountants but can put you in touch with people who can help.  You can read more about the scheme at the UK Government website.

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