Patent Box: Who Qualifies and What You Get
Learn how companies can benefit from a reduced tax rate on profits generated from their patented inventions.
The Patent Box is a tax incentive designed to reward companies that invest in innovation by reducing the tax they pay on profits made from patented technology.
Who it's for
This scheme is for companies that own patents for inventions or hold an exclusive license for those patents.
What you get
If you qualify, you can pay a lower rate of Corporation Tax on the profits that come specifically from your patented inventions.
What it costs you
While the tax benefit can be significant, you must first cover the high legal and administrative costs required to secure and maintain a patent.
The catch to know
This does not apply to all creative industries. For example, standard game development usually won't qualify unless you have invented a unique piece of underlying engine technology.
How to apply
- Secure a patent for your invention through the appropriate legal channels.
- Ensure your business can clearly calculate profits specifically derived from that patent.
- Follow the official guidance for claiming the reduced tax rate through your tax filings.
- Visit the official portal for more details: https://www.gov.uk/guidance/corporation-tax-the-patent-box