Get free updates - subscribe to our monthly newsletter Subscribe
Patent Box tax relief was introduced in April 2013 as a way to reward innovative UK companies. In general terms it means that profits from patents are taxed at 10% rather than 20%; potentially a good tax saving for many companies.
However the patent box has had a few issues due to its complexity and the phasing in of benefits. It has also come under attack; there have been concerns that companies are using preferential IP schemes to shift profits between different jurisdictions.
Because of the last point the UK Government has had to compromise on the patent box tax relief. From 1 July 2016 there are going to be major changes to the regime.
The main change to the scheme relates to where the development work occurs; any benefit will now be linked to the amount of development work incurred by the company claiming the relief.
Some companies with patents or patents pending will need to review whether they elect into the patent box by 30 June 2016. Deciding whether or not you should elect into the regime can be extremely complicated, particularly for loss making companies.
If you think this might affect you please give me a call on 0113 2211300.
If you like this article and would our FREE updates sent straight to your inbox then subscribe to our monthly newsletterSubscribe
All content © 2015 Armstrong Watson. All Rights Reserved. Website by Simon Pighills.
Armstrong Watson LLP is a limited liability partnership registered in England and Wales, number OC415608. The registered office is 15 Victoria Place, Carlisle, CA1 1EW where a list of members is kept. Armstrong Watson Accountants, Business & Financial Advisers is a trading style of Armstrong Watson LLP. Armstrong Watson LLP is regulated by the Institute of Chartered Accountants in England and Wales for a range of investment business activities.
Armstrong Watson Audit Limited is registered to carry on audit work in the UK and Ireland by the Institute of Chartered Accountants in England and Wales. Registered as a limited company in England and Wales No. 8800970. Registered office: 15 Victoria Place, Carlisle, CA1 1EW
Armstrong Watson Financial Planning Limited is authorised and regulated by the Financial Conduct Authority. Firm reference number 542122. Registered as a limited company in England and Wales No. 7208672. Armstrong Watson Financial Planning & Wealth Management is a trading name of Armstrong Watson Financial Planning Limited. Registered Office: 15 Victoria Place, Carlisle, CA1 1EW