The Patent Box and R&D Tax Relief
Maximise the returns on your R&D with the patent box and R&D tax relief schemes.
As of 1 April 2023, the main rate of corporation tax rose from 19% to 25%. Although businesses with profits of £50,000 or less will continue to pay the 19% corporation tax rate, the full 25% rate will apply to businesses with profits of £250,000 or over. For companies with profits greater than £50,000 but below £250,000 a system of marginal relief will apply.
The rise in corporation tax will no doubt be of concern, but fortunately the UK Patent Box scheme allows businesses to pay a lower rate of corporation tax (10%) on income derived from qualifying patented inventions or other qualifying IP rights. (to read more about what intellectual property qualifies for the Patent Box scheme click here).
Therefore, businesses should seriously consider protecting their innovations by filing UK or European patent applications, so that once granted, they can take advantage of the available tax relief and also have the ability to stop others from exploiting their innovations without their permission.
Given that it can take several years to obtain a granted patent, businesses who already have pending UK or European patent applications should consider accelerating the grant process to achieve a faster grant so that they can enjoy the benefits of the lower tax rate sooner.
Further information on the Patent Box scheme and how Wilson Gunn can assist in determining your eligibly can be found on our website here.
If you have any questions about the Patent Box scheme please contact a member of our patents team.