1 April 2013 will see the introduction of the “UK Patent Box”
The name is a bit of a misnomer in that although the regime covers patents it also covers other less common intellectual property rights such as plant variety rights. Under this new regime, a company paying corporation tax in the UK has the possibility to reduce its tax bill and this reduction could be significant. Instead of a corporation tax rate of 23%, profits earned from products and services covered by certain qualifying intellectual property rights will be taxed at 10%, phased in over five years; so far so good…
However in order to benefit from this “Patent Box of delights”, action should be taken now to review what proportion of a company’s income, if any, may be attributed to products or services protected by any qualifying intellectual property rights. The rules are generous, but a company must opt in to qualify for the reduced rate. Crucially, patent protection, previously dismissed as too expensive, or indeed never even considered, now has real potential, not only as a valuable asset for a business, but as an integral part of a tax saving strategy. As such, it is more important than ever for companies to regularly review their intellectual property portfolios and strategies for dealing with the same.
Contact an intellectual property solicitor
For a more detailed explanation of the Patent Box regime and the practical implications for your business, please contact Roy Crozier.