The Patent Box could be highly relevant to your company if you hold patents or exclusive licenses to patents that are actively generating income. Whether your business is in manufacturing, pharmaceuticals, technology, or any other sector where innovation drives profitability, you may be eligible to benefit from the reduced tax rate on profits derived from your patented inventions.
In order to qualify, your company must meet several conditions, including:
Qualifying IP Rights – Typically, this includes patents granted by the UK Intellectual Property Office, the European Patent Office, or other approved authorities under international conventions.
Development Requirement – The company must have been actively involved in the creation or development of the patented invention, or in activities contributing to its further development or commercial use.
Income from Qualifying Patents – The Patent Box applies to profits derived from the commercialisation of qualifying IP, which can include income from the sale of products that incorporate the patented invention, licensing royalties, or even damages received for patent infringement.
If your company is generating income from patents and meets the above requirements, Patent Box could provide you with tax savings. However, the calculations required to determine eligible profits and tax relief can be complex, and the specific rules for qualifying income and profit calculations must be carefully followed.