How and When to Claim

What's Next?

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An election must be made to benefit from the reduced rate of Corporation Tax that applies to the Patent Box and the election must be made within two years after the end of the accounting period in which the relevant profits and income arose.

The full benefit of the regime was phased in from 1 April 2013 and we will advise how to apply the appropriate percentage to the profits your company earns from its patented inventions.

The appropriate percentages for each financial year are:

  • 1 April 2013 to 31 March 2014: 60 per cent
  • 1 April 2014 to 31 March 2015: 70 per cent
  • 1 April 2015 to 31 March 2016: 80 per cent
  • 1 April 2016 to 31 March 2017: 90 per cent
  • from 1 April 2017: 100 per cent

Example

If a company has trade Corporation Tax profits of £100,000 in the financial year up to 1 April 2015, which qualify in full for the Patent Box, and the main rate of tax is 21 per cent, then instead of arriving at a tax charge of £10,000 by multiplying £100,000 by 10 per cent, the calculation is:

Calculation

Amount

Profits chargeable to Corporation Tax

£100,000

Patent Box deduction =
£100,000
 × 80% ((21 - 10) ÷ 21)

£36,666

Profits chargeable to Corporation Tax

£63,334

Tax payable = £63,334 × 21%

£13,300

What to do next?

As we will advise and prepare your application for submission to HMRC – and we are also able to provide advice on how your company could become eligible for the Patent Box scheme even if you do not currently have an appropriate patent we suggest that you call us to discuss whether your business might be suitable for a claim under The Patent Box arrangement.