The “Patent Box” – tax changes to promote innovation
As from 1 April 2013 changes to the corporation tax regime come into effect designed to promote innovation through the use of the patent system. From that date companies will be able to apply to have profits attributable to “qualifying intellectual property” taxed at the rate of 10% compared with the current rate of 24%.
“Qualifying intellectual property” means UK and European registered patents or rights exclusively licenced under such patents. Attributable profits will include profits from the sale of patented products or processes and royalties or licence fee income where the patent rights are licensed to third parties.
Expert accountancy advice should be sought on the implications for your business. We also anticipate the need for a careful review of the way in which patent rights are vested and licensed, particularly within groups of companies, to ensure that the requirements of the legislation are met.
If you would like any more information about this topic, please contact Philip Sloan.