What is keeping you busy lately?
I am currently assisting a number of clients with claiming the patent box tax relief. Patent box is a corporation tax incentive that rewards companies by potentially halving the corporation tax payable on profits arising from qualifying intellectual property (IP) rights, predominantly UK or European office patents. The scheme has been in existence since 2013 and although a bit of a slow burner, is starting to gain some traction for companies wanting to obtain financial reward in return for protecting their technology which can often be quite costly.
It sounds like it would be valuable to a lot of companies, is it easy to claim?
Electing in requires a simple disclosure in a company’s tax return in the first relevant year, however, whether a company should elect in needs to be carefully considered as there are other factors to consider besides owning or having an exclusive license over a patent, including satisfying a 'development condition'. Even if the patent is not yet granted, an election can be made to ‘bank’ the calculated patent box profits until the year of grant. The rules can be quite complex, but the potential financial reward can be extremely valuable and may help to fund investment into new research and development projects with a view to building an even larger IP portfolio in the future.
How can companies find out more?
Just let us know if you have a patent! We will guide you through the rules to obtain the information we need. If initial discussions identify that the company may qualify for claiming the relief, then we can undertake some indicative calculations to determine whether patent box could be of benefit to your company.
Tell us a bit about yourself
I have been at Hazlewoods for just over ten years, having joined in December 2011 to specialise in corporation tax and specifically innovation tax reliefs. Working for a Gloucestershire firm, I am definitely in the minority by supporting rival rugby team Worcester Warriors and am often reminded of my team’s performance when they lose – especially when they play Gloucester!
For more information on patent box and other corporation tax incentives, please get in touch with Jemma at jemma.vaughan@hazlewoods.co.uk or 01242 680000.