In the same way that £ms are potentially being lost on R&D tax credit claims across the north west, it also appears from my discussions with companies that too few businesses are aware of the forthcoming Patent Box company tax relief.
Admittedly, the Patent Box is a brand new tax incentive to be introduced with effect from 1 April 2013 but some companies will already be in financial accounting period ends that straddle this date so are effectively already potentially eligible.
The Patent Box will allow for worldwide income derived from qualifying registered patents to be subject to a reduced UK corporation tax rate of just 10%. This will result in a 50%+ reduction in the rate of corporation tax suffered – so a company with say £1m of taxable profits of which 50% is derived from patents could save over £30,000 in tax per year!
The scope of the Patent Box is also extremely wide in that a product need only physically incorporate a single patented invention for the income from the entire product to fall within the Patent Box.
HM Revenue & Customs have budgeted that this tax relief will be worth over £1bn to the UK economy yet many companies may unwittingly miss out on claiming their share if they are unaware of this new Patent Box tax incentive.
If you have either registered patents; patents pending or have simply held off registering any patents – now might be a good time to assess your eligibility for the Patent Box as there are a few hoops you need to jump through if you are to have a qualifying claim.
We can help you model the potential tax savings for your company and assist you in preparing your systems to maximise your Patent Box claim.