Patent Box Relief

Once technology has been developed and commercialised, Patent Box Relief can offer significant corporation tax savings to companies on the profits they generate.

Companies that elect into the Patent Box regime obtain an effective 10% rate of Corporation Tax on profits attributable to qualifying Intellectual Property (IP), rather than the main rate of Corporation Tax (currently 19%, increasing to 25% from April 2023, subject to a small profits rate and marginal relief). The Patent Box regime is complex; however, at Johnston Carmichael our specialists are on hand to help you through every step of the process.

Our range of Patent Box services includes:

Economic feasibility studies

Before making a claim, we can help you to assess the potential benefits available to your business and forecast when those benefits are anticipated to arise. Is a Patent Box claim likely to lead to a tax saving? Is now the ‘right time’ for your company to claim? How much tax could your company save?

Eligibility assessments

We can assess whether the gateway conditions into the regime are satisfied so that there are no nasty surprises when it comes to making a Patent Box claim.

Preparation of the Patent Box claim

Once it is established that a claim is worthwhile and the entry conditions have been met, our specialist team can prepare the Patent Box calculation and supporting documentation for your claim. We can incorporate the claim into the company’s Corporation Tax return and submit the necessary information to HMRC.

IP, patents and licences

Are you currently exploring the benefits of applying for a patent? Do you need to document intra-group licensing arrangements? Would you like to understand the legal process further? We can put you in touch with patent attorneys and IP lawyers or work alongside your existing advisers to understand your IP strategy and provide tax advice relevant to your company’s current circumstances and future plans.

Patent Box health checks

If you are already claiming, we can carry out a review of your existing claims to identify the potential for additional tax savings and any areas of risk.

Tax planning work and other advice

There are a variety of other ways in which we can help. For example, if you are:

• contemplating a restructure of your business/group;
• thinking about transferring IP;
• preparing for a sale; or
• thinking about protecting your IP.

There are lots of factors that can play a part in the amount of Patent Box Relief available to a company. We can help you to understand how the Patent Box rules may be affected by other commercial drivers of your business so that you can include Patent Box considerations in your decision-making process. We can also work alongside your Corporation Tax compliance team to ensure that the interaction between your tax computation and Patent Box claim are considered upfront.