What is Patent Box?
The Patent Box tax relief is a valuable incentive offered by the UK government to reward companies that innovate and invest in new ideas, products, or processes. If your company profits from patented inventions, technologies, or processes, you can benefit from a reduced corporation tax rate of just 10% on these profits. This allows you to save money and reinvest in future innovation, making it easier for your business to grow and stay competitive.
At TaxTek, we specialize in helping businesses like yours navigate the Patent Box regime, ensuring you maximize your tax savings while focusing on what matters most—innovation.
Who Can Benefit from Patent Box?
To qualify for Patent Box tax relief, your company must:
- Be liable for UK corporation tax and generate profits from patented inventions.
- Either own the patents outright or hold an exclusive license to use them.
- Have undertaken some form of development on the patented product or process.
If you’re part of a group of companies, you may still qualify if another group member has undertaken the development work. If your company earns income from licensing a patent to others, either in the UK or within the European Economic Area (EEA), you could also be eligible.
Do I Qualify for Patent Box?
Opting into the Patent Box regime is optional, but it can offer significant tax savings if your business qualifies. If your company owns patents, licenses them out, or has even sold a patent, you could benefit from this relief. The types of patents that qualify include those registered in the UK, the EU, or certain other EEA countries.
Patent Box tax relief is especially beneficial for companies engaged in research and development (R&D). In fact, if you qualify for Patent Box, you may also be eligible for R&D tax relief, which can provide even more savings. At TaxTek, we’ll assess your eligibility for both Patent Box and R&D tax credits, ensuring you claim everything you’re entitled to.
Making the Patent Box Claim
Patent Box calculations can be complex, involving a formula that takes into account your qualifying R&D expenditures and profits. Here’s a simple breakdown:
- A company’s relevant patent profits are calculated by applying an R&D fraction to the profits generated from patented products or processes.
- This formula allows for a 30% uplift in R&D costs, which increases your tax relief by recognizing the significance of your company’s innovation efforts.
While the numbers might seem complicated, TaxTek will handle the entire process for you. We ensure that your claim is accurate, compliant with HMRC rules, and delivers the maximum benefit possible.
How TaxTek Helps You Succeed
At TaxTek, we take the stress out of claiming Patent Box tax relief. From the initial consultation to submitting your claim, our team of tax experts will handle everything. We know exactly what HMRC is looking for, so we ensure that your claim is complete and optimized for approval.
We also stand by your claim, and if HMRC raises any inquiries, we’ll handle the defense at no extra cost to you. Our goal is to minimize the impact on your day-to-day operations — we do the work, and you get the tax benefits.
Why Choose TaxTek?
Choosing TaxTek means choosing a partner with deep expertise in Patent Box tax relief, R&D tax credits, and other forms of tax relief designed to support innovation in the UK. We know that R&D doesn’t always mean ground-breaking, blue-sky research. Whether you’re improving existing products, developing new processes, or even licensing patents, we’ll ensure you receive the relief you deserve.