{"id":15387,"date":"2023-05-24T09:47:08","date_gmt":"2023-05-24T08:47:08","guid":{"rendered":"https:\/\/www.langricks.com\/?p=15387"},"modified":"2023-05-24T13:51:03","modified_gmt":"2023-05-24T12:51:03","slug":"patent-box-reduce-corporation-tax-with-uk-intellectual-property","status":"publish","type":"post","link":"https:\/\/dev.withcreative.co.uk\/langricks\/patent-box-reduce-corporation-tax-with-uk-intellectual-property\/","title":{"rendered":"Patent Box &#8211; Reduce corporation tax with UK Intellectual Property"},"content":{"rendered":"<h2 style=\"font-weight: 400;\"><strong>What is Patent Box?<\/strong><\/h2>\n<p>Patent box is HMRC&#8217;s scheme to encourage companies to keep and commercialise intellectual property in the UK. It allows companies to benefit from a lower rate of Corporation Tax on profits earned from its UK patented inventions. By\u00a0incentivising companies to keep their IP within the UK the HMRC rewards them by reducing the corporation tax on profits resulting from qualifying IP income to 10%.<\/p>\n<p>As Corporation Tax jumped from 19% to 25% from 1 April 2023 for companies with profits over \u00a3250,000 utilising Patent Box could have significant benefits for innovative companies in the UK.<\/p>\n<p style=\"font-weight: 400;\"><strong>\u00a0Key areas of note for the Patent Box scheme.<\/strong><\/p>\n<ul style=\"font-weight: 400;\">\n<li>Your company could pay a reduced rate of <strong>10% Corporation Tax<\/strong> if it exploits patented inventions and innovations.<\/li>\n<li>You can only use the Patent Box if your company;\n<ul>\n<li>Is liable for Corporation Tax<\/li>\n<li>Makes a profit from exploiting patented inventions<\/li>\n<li>Owns or has exclusively licenced-in the patents<\/li>\n<li>Has undertaken qualifying development on the patents<\/li>\n<\/ul>\n<\/li>\n<li>You have to make an election to benefit from the reduced rate of Corporation Tax that applies to the Patent Box. This must be done <strong>within 2 years after the end of the accounting period<\/strong> in which the relevant profits and income arose.\n<ul style=\"font-weight: 400;\">\n<li>You can make an election:\n<ul style=\"font-weight: 400;\">\n<li>In the computations accompanying your Company Tax Return<\/li>\n<li>Separately in writing.<\/li>\n<li>There is no special form of words for this election and no box on the Corporation Tax return.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<li>To identify which profits to enter in the Patent Box, income needs to be separated, i.e. separate relevant intellectual property income from other income. This can be done by streaming your income.<\/li>\n<li>Not all of your company profits may come from exploiting patented inventions. To class profits as intellectual property income, they must come from at least one of the following activities:\n<ul>\n<li>Selling patented products including:\n<ul>\n<li>The patented product<\/li>\n<li>Products incorporating the patented invention<\/li>\n<li>Bespoke spare parts<\/li>\n<\/ul>\n<\/li>\n<li>Licensing out patent rights<\/li>\n<li>Selling patented rights<\/li>\n<li>Infringement income<\/li>\n<li>Damages, insurance or other compensation related to patent rights<\/li>\n<\/ul>\n<\/li>\n<li>Companies in the manufacturing and service sectors can generate qualifying income for the Patent Box if they:\n<ul>\n<li>Manufacture using a patented process<\/li>\n<li>Provide a service using a patented tool<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p style=\"font-weight: 400;\"><strong>If your business utilises Patented Intellectual Property then it could benefit from a reduction in Corporation tax. <\/strong><\/p>\n<p style=\"font-weight: 400;\"><strong><a href=\"https:\/\/www.langricks.com\/contact\/\">Get in touch<\/a> with the Langricks team today to see how we can help with Patent Box.<\/strong><\/p>\n<p style=\"font-weight: 400;\">\n","protected":false},"excerpt":{"rendered":"<p>What is Patent Box? Patent box is HMRC&#8217;s scheme to encourage companies to keep and commercialise intellectual property in the UK. It allows companies to benefit from a lower rate of Corporation Tax on profits earned from its UK patented inventions. By\u00a0incentivising companies to keep their IP within the UK the HMRC rewards them by [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":15388,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"content-type":"","footnotes":""},"categories":[21],"tags":[],"class_list":["post-15387","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-accountancy-news"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.0 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Patent Box - Reduce corporation tax with UK Intellectual Property - Langricks Chartered Accountants and Business Advisers<\/title>\n<meta name=\"description\" content=\"Reduce Corporation Tax in the UK with Patent Box. 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