Patent tax relief

Patent tax relief

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I have a client company who generates all turnover from a patented product. From April 2013, a "patent box tax rate" of 10% is being introduced in relation to profits generated from patent licensing or patented products.

I have reviewed some of the reference material on this topic on HMRC website and it seems that the proportion of total gross income (which I think basically means turnover) relating to patented products should be calculated first, this is then applied to profits and those profits are then charged to corporation tax at a 10% "patent box" rate. There are a few other parts of the computation regarding finance income and other cost adjustments.

Does anyone know much more about this area at all? In the case of my client company who sells one product which is patented, will they get access to the 10% rate against all profits from 1 April 2013?

All help appreciated as always folks.

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By Steve Kesby
04th Apr 2012 11:59

Tax Adviser article

I'm not sure if you've seen it, but there was an article on this in January's Tax Adviser.

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