The Patent Box will allow businesses to apply a lower, 10% rate of Corporation Tax to profits from patented inventions and certain other innovations. The tax relief will be phased in over a period of five years, with 60 per cent of the benefit available from 1 April 2013 and the full benefit applying from 2017 onwards.
A company can only benefit from the Patent Box if it is liable to Corporation Tax and makes a profit from exploiting patented inventions and the company must also own or exclusively license-in the patents and must have undertaken qualifying development on them.
The new legislation applies to profits generated from existing and future patents granted by either the UK Intellectual Property Office or the European Patent Office.
If you would like further information about Patent Box and whether you could qualify please contact a member of the tax team.