Patent Box

What is it?

Patent Box is a genuine game-changer for UK industry. It's a new initiative from the Government designed to effectively reduce the rate of company tax on profits from the sale of patented products down to 10% for 20 years. This rate will apply to worldwide profits arising from the exploitation of UK patents and patents granted by the European patent office, or from exclusive licence over such patent rights.

The Government has good reason for being so generous. It recognises that a huge amount of R&D being undertaken in the UK is failing to drive economic prosperity. Why? Because businesses are taking their new ideas and innovations overseas to enjoy the benefits of more favourable tax regimes. Patent Box aims to put an end to this situation.

All innovative companies generating profits from patents and patented products are eligible, regardless of their industry sector.

How do I work out my Patent Box claim?

Patent Box must be actively claimed in the company's corporation tax return. It is heavily tied up with R&D Tax Relief and is complex in both its construction and interpretation. That's why specialist advice is required to undertake the corporation tax calculations needed to gain the full benefit of the combined R&D Tax Relief and Patent Box schemes.

Bradshaw Grice is uniquely positioned to calculate the benefit of the two schemes. That's because we carry out both the R&D assessment and a calculation of the potential value of Patent Box through your accounts and plans. Most R&D firms do not have the skillset needed to understand the Patent Box legislation as well as the detail of the R&D report as it forms part of the corporation tax computations. Bradshaw Grice does.

Furthermore, many of the Patent Attorney practices Bradshaw Grice partners with are happy to talk free-of-charge with our clients or potential clients about the validity, likely costs and next steps of gaining a patent that can fit into the Patent Box.

 How about Patent Pending?

Profits generated in the "Patent pending" period can qualify for the 10% corporation tax rate but this will require action to be undertaken in advance of the patent being granted. A speedier process is currently being considered by the IPO.


Don't waste time in finding out if you are eligible to claim. Contact Bradshaw Grice today.