Patent Box FAQ's - Haines Watts West Midlands

Patent Box

FAQ's

How do I know if my product, process or framework has advanced an element of knowledge within my industry?

Government guidelines stipulate that your invention must be new in the sense that it has not been made publicly available anywhere in the world such as journals or publications.

However, you don’t need to reinvent the wheel. Your invention can still be new whilst being a small but significant improvement or update to an existing product, process or framework.

If an expert in your field wouldn't easily be able to figure it out for themselves, then it's not an obvious solution or improvement.

What if my patent hasn't been approved yet?

Applying for a patent can be a lengthy process- with some taking up to five years to be granted. Not to worry though, your business can elect into Patent Box tax relief before your patent has been granted.

Qualifying profits that have been generated from the date you first apply for a patent to the date you are awarded the patent can be accumulated and then claimed in your tax return for the year your patent is rewarded.

Am I eligible for a Patent?

Whilst you will need to speak to one of our advisors who can guide you through the patent process, there are a number of things you can check which may mean you are likely to qualify for a patent and subsequently likely to benefit from Patent Box tax relief.

I think my invention can be used or is currently being used. Does this qualify?

Whether you have developed a product, a technical process or a framework- you could be eligible. Looking one step further to Patent Box, you will only receive tax relief where your patented invention has been commercialised and you’ve received profits as a result.

If you think the above applies to you, then you are likely eligible for a Patent and subsequently eligible for Patent Box tax relief.

Why has the Government introduced the Patent Box regime?

The Government wants to incentivise businesses to keep their inventions and innovative work within the UK, by reducing the amount of corporation tax a business is liable to pay as a direct result of intellectual property.

Increased cashflow is always a good thing in business, no matter what your goal is for the current financial year. Patent Box allows a reduction of corporation tax from 19/25% (depending on profit) to 10% in line with the profits you generate as a direct result of a patented product or process.