Following the launch of the patent box, HMRC have published a guide advising UK companies about how they can pay less tax on profits generated from their patented inventions. From April 2013, any profits from inventions that are protected by a UK patent will be taxable at a significantly lower rate of corporation tax. The relief will be phased in from April 2013, starting at around 15% and falling to 10% by 2017.
In order to receive the tax break, companies must own or exclusively license-in the patents and must have undertaken qualifying development on them. The much-publicised rate of 10% will not actually apply until 2017. Instead, the tax rate that will apply to qualifying profits in the coming financial year will be 15.2%. The tax reduction will be tapered, so the 10% rate will only apply to 60% of the qualifying profits in 2013/14, rising to the full 100% of profits in 2017. Whist clearly of limited interest to many companies, the size of the tax relief means that all opportunities need to be properly identified.
Patent box tax reliefs
News: October 2012
Patent box tax reliefs
Following the launch of the patent box, HMRC have published a guide advising UK companies about how they can pay less tax on profits generated from their patented inventions. From April 2013, any profits from inventions that are protected by a UK patent will be taxable at a significantly lower rate of corporation tax. The relief will be phased in from April 2013, starting at around 15% and falling to 10% by 2017.
In order to receive the tax break, companies must own or exclusively license-in the patents and must have undertaken qualifying development on them. The much-publicised rate of 10% will not actually apply until 2017. Instead, the tax rate that will apply to qualifying profits in the coming financial year will be 15.2%. The tax reduction will be tapered, so the 10% rate will only apply to 60% of the qualifying profits in 2013/14, rising to the full 100% of profits in 2017. Whist clearly of limited interest to many companies, the size of the tax relief means that all opportunities need to be properly identified.
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