16 February 2021
Services:
Tax Reliefs including R&D
The most recent Patent Box report by HM Revenue & Customs has exposed an alarming lack of awareness across the North East. Despite recording the fastest growth in patent applications, the region also recorded the fewest number of Patent Box claims. The report found only 2% of total claims came from the North East, with just 30 companies using the scheme. If your business is innovating, it is very possible that you are missing out.
What is Patent Box?
In short, Patent Box is a low corporate tax regime, introduced to drive innovation within the UK. Companies that exploit any UK or EU patents (or exclusive licensing) can enjoy 10% corporate tax on worldwide, eligible profits. Qualifying profits include:- Sales on patented products.
- Sales of products that incorporate patented items.
- License fees or royalties for granting rights over patents.
- Income received as damages for infringements on patent rights.
Used alongside R&D tax credits, Patent Box makes the cost of developing a patent worth every penny. You can expect a Patent Box return to offset your initial investment significantly – if completed correctly. With such a generous incentive on offer, it is really disappointing to see so few of the North East’s ground-breaking companies benefit. We need to ensure that inventive businesses are rightly rewarded and our region continues on its trajectory as the UK’s fastest growing hub for innovation.