Patent Box Tax Relief

Patent Box tax relief is a government tax initiative model that provides a reduced rate of corporation tax (10%) on profits attributable to patents and other IP. If a company owns or has the exclusive license to qualifying patents, they are potentially eligible for Patent Box tax relief. This relief is available on profits deriving from the use, sale, or licensing of the businesses patented inventions.

Scheme Intent

The intent of the scheme is similar to that of R&D tax relief, as it is designed both to encourage businesses to invest in research and development and incentivise the commercialisation of IP.

Relief

This relief is received in the form of a tax deduction, and can be claimed in conjunction with the R&D tax relief scheme.

See R&D Scheme

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Types of Patent Claims

To qualify for the relief you must own or have an exclusive licence to the patent.

Types of revenue that patent boxes can be claimed through:

Sales income

Sales from the selling of a product which is covered by a patent.

License fees and royalty

Any payments received from a third party using the owed patent.

Proceeds of realisations

Income derived from the selling of a patent or the patent's exclusive licensing.

Revenue received

Revenue received as a result of infringement on your patent from unauthorised use (damages, insurance proceeds/other compensation): any income payable to the company from an infringement or alleged infringement.