The Patent Box is part of the Government's growth agenda
First introduced in 2013, it aims to provide an additional incentive for companies to retain and commercialise their existing patents, and to develop new, innovative patented products.
It has the potential to almost halve a company's Corporation Tax bill, reducing the rate to just 10% on any profits attributable to qualifying patents. That's a generous and appealing offer for businesses - one you should seek to investigate and maximise if you're eligible to claim.
How does Patent Box apply to businesses?
The incentive is designed to encourage companies to commercialise their high-value patent development, R&D and retain manufacturing jobs in the UK.
Businesses that are liable to pay UK Corporation Tax need to show they've made profit from qualifying patented inventions. Patents must have been granted by the UK Intellectual Property Office or the European Patent Office, as well as administrations in some other qualifying European territories. But once the IP is patented, worldwide income from it (such as licensing and royalties) becomes eligible.
If you can't claim under Patent Box now, or don't know if you can, then you should be taking steps today to make sure you can claim in the future. You can seek advice from us on a no obligation basis.
A full, accurate Patent Box claim is complex. It became even more complicated and restrictive in 2016, when the rules were changed for new applicants. Companies are now required to track and trace their R&D expenditure on developing their qualifying IP rights, to show that their development led to the patented IP.
As a result, many businesses are reluctant to claim because they may not have understood what's needed, or don't have the internal resources to make an effective claim. MMP's Patent Box experts will work with your team to investigate the potential and fully document and compile your claim. We can help you make your first claim, review your existing claim process if you are already claiming and continue to provide long-term support by planning and making sure the right data is collected and submitted each year.
Why should an IP consultant be involved in Patent Box claims?
MMP can take you through the full Patent Box process
Getting the full picture
A robust Patent Box claim should illustrate your business in detail. This includes where your company sits within your industry, your depth of involvement with each patent, patent filing and licencing relationships with other companies. We take all of this into account when assessing your eligibility, so we'll arrange a mutually convenient schedule of interviews and information gathering with your team. We'll want to speak with people across your business from development engineers to IP management and marketing, to gather all the necessary information.
Adapting to meet your needs
Our timescale for working on your claim will depend on the size of your company and the complexity of your IP and business activities. We're happy to adjust to your existing schedules, so that our team meets deadlines without your team feeling rushed.
Crunching the numbers and preparing the report
Calculating the final figures for a Patent Box application isn't easy - it involves identifying specific revenue streams, handling each different IP right individually, fractions of R&D spend, and a HMRC formula. There's the IP management aspect and the technology and a written demonstration of the methodology to document. You can leave all of this time-consuming legwork to us.