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The Patent Box is a tax regime for UK companies which allows relevant profits from patents and other forms of Intellectual Property to be taxed at a preferential rate of 10%.
What is Patent Box relief?
The Patent Box allows companies to elect to apply a 10% corporation tax rate to profits attributable to qualifying patents and certain other forms of intellectual property (‘IP’), whether received as royalty income or embedded in the sales price of products.
How does the relief work?
The reduced rate of 10% tax is delivered through an additional deduction in the corporation tax computation. A company’s profits which benefit from Patent Box are a proportion of the corporation tax profit of the company’s trade attributable to the qualifying income and are called its ‘relevant IP profits’.
Patent Box is generally regarded by HMRC and the tax profession as an underclaimed tax relief and at UHY we are currently encouraging companies to review whether, or not, they could make a successful claim.
Patent Box tax relief guide
Read our Patent Box tax relief guide to find out more about the impact on your business.
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