The Patent Box

The Patent Box tax relief regime is used in the UK to incentivise research and development by taxing patent revenues differently.

Patent Box is a special tax regime used in the UK to incentivise research and development by taxing profits derived from the sale of patented items differently. Introduced in April 2013 as part of the government’s economic growth agenda, Patent Box is designed to encourage businesses to promote innovation and invest in research and development (R&D), and ultimately retain intellectual property (IP) and corresponding jobs in the UK.

Patent box, also known as intellectual property box regime, enables businesses to make profits through their Patents and reduce the tax paid on those profits. The UK Patent Box is a relief from corporation tax and is only available to qualifying companies.

Companies can make a profit from their patented inventions by:

The sale of patented products, or products containing the patented invention
Licensing out
Selling patented rights
Infringement income
Damages, insurance or compensation related to the patent rights

Patent Box qualifying requirements

There are specific eligibility requirements, but essentially if your UK business is liable for corporation tax and you have a UK or EU patent, you could qualify for Patent Box Tax Relief. Your company must have made a significant contribution to the creation or development of the patented item and will need to elect into the Patent Box regime. Qualifying requirements include:

Being liable for corporation tax and making a profit from patented inventions
Owning the patents, or exclusively license-in the patents
Having undertaken qualifying development
Made a significant contribution to the creation or development of the patented invention

The calculations for determining the qualifying expenditure for Patent Box Tax Relief are complex. The team at Cooden Tax Consulting specialise solely in Technology Tax Reliefs and are experts in Patent Box Tax Relief. Speak with our Patent Box experts now to see if your patent qualifies.

Don’t miss out on Research & Development Tax Relief. Maximise your tax relief and you have more opportunity to invest in growth.

Electing into the Patent Box regime

The Patent Box is an optional regime, meaning a company can only benefit from the Patent Box if it elects into the Patent Box regime. A company may elect into the Patent Box regime for profits earned in a particular accounting period within 2 years of the end of the accounting period in which the relevant profits arose.

Patent Box FAQs

Can I claim both Patent Box and R&D Tax Reliefs?

Do I qualify if my patent is registered in another country?

I have licensed my patent, can I still claim Patent Box Tax Relief?

I have a licence to sell a patented item from a third party, can I still claim Patent Box Tax Relief?

Is it possible to make a patent box loss?

How do I claim?

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