The Patent Box

What is the Patent Box?

The Patent Box was introduced by HMRC in April 2013 and was designed to complement the R & D tax incentives by encouraging companies to commercialise their patents and R & D in the UK.

Who can benefit from it?

Any company that is liable to corporation tax and makes a profit from exploiting patented inventions.  The company must own or exclusively license the patents and must have undertaken qualifying development on them.

If you are part of a group, you may benefit from the regime if one company in the group has undertaken the qualifying development but another company sells the product.

What patents qualify?

You can benefit from the Patent Box if you own or exclusively license patents granted by the:

  • UK Intellectual Property Office
  • European Patent Office
  • Following countries in the European Economic Area: Austria, Bulgaria, Czech Republic, Denmark, Estonia, Finland, Germany, Hungary, Poland, Portugal, Slovakia and Sweden.

How does it work?

The patent box enables companies to apply a lower rate of corporation tax to profits earned after 1 April 2013 from its patented inventions and certain other innovations. The relief began to be phased in from 1 April 2013 and by 1 April 2017 companies will be able to benefit from a 10% tax rate.

What income can qualify?

The following income and profits qualify:

  • Sales of products with a registered patent
  • Sales of products containing a part with a registered patent
  • Licence fees and royalties
  • Sale of intellectual property rights
  • Damages, insurance or other compensation deriving from infringement on your patent

How can we help?

Here at HSJ we can assist you in identifying what profits in your business could potentially qualify under the patent box regime and then undertake the necessary calculations to reduce your corporation tax liability should you qualify.

For further information or to discuss how this could help you,

Please contact Natalie on: 01633 815800

or email