Are your clients taking advantage of the Patent Box regime, if not:

Do you have any clients who:

  1. Earn a taxable profit in each or most years and
  2. Have, or are filing, for a Patent that was, or is being created, by their in-house R&D efforts?

If the answer is yes to both of the above questions, then your client should consider electing to take advantage of  the Patent Box regime. If your client is making an R&D tax credit claim, the Patent Box can be claimed as well. In other words, a company can claim for both R&D tax relief and the Patent Box.

Patent Box Regime

The Patent Box regime enables companies to pay a reduced rate of tax (10%) on profits generated from patented inventions. As corporate tax rates increase, this effectively cuts the tax rate on profits related to the Patent by roughly half.

For example, let’s say a company had a total taxable profit in a year of £500K and 40% or £200K of the profit related to the patent products. Also, assume the general corporate tax rate for the company is 19%. The tax savings is therefore 9% (i.e. 19% less 10% rate on patent profit) times £200K or £45K. Also, remember this is not a one-time benefit but would be applied for each year the conditions are met.

This relief is very generous and applies to both SMEs and large companies.

How can RDP help?

RDP has the experience and expertise to carry out all areas necessary to make the Patent Box election on behalf of companies. Including any valuations or benchmarking studies that need to be done. We would be happy to have a free consultation to determine if a company is a good candidate for the Patent Box.

Also, if you would like to discuss any of our other services and fees, please do not hesitate to contact the team today on 0208 214 1341 or email Jenni on [email protected].