Patent Box Relief Claim

Patent Box to reduces Corporation Tax on profits for companies; this relief is one of the least claimed reliefs by limited companies. HMRC has published official statistics on the number of companies claiming tax relief under the UK Patent Box. The Patent Box allows qualifying companies to apply a lower 10% Corporation Tax rate on profits arising from patent exploitation. The benefit was phased in from 1 April 2016 with the full benefit of the Patent Box available from 1 April 2017. The newly published statistics include figures for 2017-18 together with partial figures for 2018-19.

https://www.gov.uk/guidance/corporation-tax-the-patent-box

The statistics show that in 2017-18, 1,305 companies applied the lower Corporation Tax rate (on a phased basis) to profits attributable to patents and other qualifying intellectual property claiming relief of £1,101m. In 2018-19, 1,230 companies have so far claimed relief under the Patent Box of £992m. These figures are expected to be revised upwards when more data becomes available.

28% of the companies were classified as large but together they claimed the vast majority (over 92%) of the total relief. Most of the claims were made by the manufacturing sector but there were also claims from other industries including those defined as falling under the ‘Wholesale and Retail’ and ‘Scientific and Technical’ sectors.

It allows companies to apply a lower rate of Corporation Tax to profits earned from its patented inventions. Companies must elect into the Patent Box to apply the lower rate of Corporation Tax which is 10%.

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