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The Government is consulting on a preferential regime for profits arising from patented inventions, known as a Patent Box:-

  • - The reduced tax rate will apply to profits derived from Patents and certain IP rights, including profits earned from selling products that incorporate patented technologies.
  • - The rights must be either UK or EU Patents, and the proprietor must have assisted in the development of the technology in question, and it must be in use in their business.
  • - The benefits of the regime will come into effect from 1st April 2013, and is open to all industries/ sectors.

The Patent box will form part of the Finance Bill 2012 and will encourage companies to locate the high-value jobs and activity associated with the development, manufacture and exploitation of patents in the UK. It will also enhance the competitiveness of the UK tax system for high-tech companies that obtain profits from patents.
Recently, the Government published a document entitled "Corporate Tax Reform: Delivering a More Competitive System" (available here). As part of this document, the consultation on the taxation of innovation and intellectual property included in this document is available here.
More information is available on the Treasury website here.


As you may know a Patent application can take a number of years to get to grant so it is advisable to begin aligning your technologies early on, and seeking advice as to how to make full use of this initiative. For more information, contact your usual adviser, or email us here.

Corporation Tax Reform update-22 March 2012 (NEW)