Member Article

Innovators urged to take advantage of Patent Box

Innovative businesses are being urged to act quickly, in order to reap the benefits of the Patent Box

Experts from PwC suggest businesses with new technology to act as legislation that introduces the Patent Box was given Royal Assent last week.

The legislation will provide a 10% rate of Corporation tax for profits from patented technology, as opposed to the forecast headline rate of 23%.

This will be phased in from April 2013, and PwC estimate that it will ultimately save UK companies around £1bn a year.

PwC note the scheme is very generous as it requires only one patent in a product for the whole product to qualify for the lower rate of tax.

There is also no requirement for the UK company to legally own the necessary patent, but can qualify where an overseas group company holds the required patent and grant an exclusive licence to the exploit it.

Lynsey Fothergill, senior manager, tax at PwC Newcastle, said: “The Patent Box is key to making the tax regime competitive for innovative companies and will help to put the UK back on the map as a top location for innovative industries.

“It will undoubtedly encourage businesses across a wide range of sectors, such as manufacturing and engineering, to invest in the UK, generating growth and creating jobs.

“Given that the new regime will apply to qualifying income after April 2013 businesses should be reviewing their intellectual property now and consider how their activities may be impacted to ensure that they are able to maximise the benefits available to them under the Patent Box.”

This was posted in Bdaily's Members' News section by Tom Keighley .