The Patent Box will provide a reduced [10%] corporation tax rate for companies which will be introduced progressively from April 2013.
It will apply to companies exploiting patented inventions or certain other medicinal or botanic innovations.
The reduced rate will apply to a proportion of the profits derived from:
- licensing or sale of the patent rights;
- sales of the patented invention or products incorporating the patented invention;
- use of the patented invention in the company’s trade; or
- infringement and compensation.
The Patent Box will be an optional regime. Companies elect into it.
The reduced rate of tax will be delivered through an additional deduction in the corporation tax computation.
To minimise administrative costs and compliance burden, Patent Box profits for many claims will be calculated using an approximate, largely formulaic, approach. Companies will however be able to opt to identify the profit through a more bespoke calculation.
Find out more about this scheme including guidance about legislation for the Patent Box athttp://www.hmrc.gov.uk/budget-updates/march2012/patent-box-tech-note.pdf.