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Open the box! The Patent Box

4th Mar 2013
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The Patent Box enables companies to apply a lower rate of Corporation Tax to profits earned after 1 April 2013 from their patented inventions and certain other innovations.

The relief will be phased in from 1 April 2013 and the lower rate of Corporation Tax to be applied will be 10 per cent.

The guide at the link below explains who can elect for the Patent Box, which patents are eligible, and how and when to claim.

http://www.hmrc.gov.uk/ct/forms-rates/claims/patent-box.htm

This basic completely simple précis below is taken from:

http://www.hmrc.gov.uk/manuals/cirdmanual/CIRD200110.htm

The Patent Box allows companies to elect to apply a 10 per cent rate of Corporation Tax from 1 April 2013 to all profits attributable to qualifying patents, whether paid separately as royalties or embedded in the sales price of products. The regime will also apply to other qualifying intellectual property rights such as regulatory data protection (also called ‘data exclusivity’), supplementary protection certificates and plant variety rights. Other non-qualifying profits in these companies will continue to be taxed at the main rate.

The aim of the Patent Box is to provide an additional incentive for companies to retain and commercialise existing patents and to develop new innovative patented products. This should encourage companies to locate the high-value jobs associated with the development, manufacture and exploitation of patents in the UK and maintain the UK’s position as a world leader in patented technologies.

Why not tell us how you are approaching this new relief?

Click here to download a PDF of this tax tip

We are Keytime. We've been developing tools for accountants for over 20 years, and we believe we sell the best value software on the market today. For more information visit www.keytime.co.uk

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By Ken Jones
06th May 2013 07:58

Patent Boa and your inventive clients

 

This is excellent news for the UK. Perhaps this new tax will encourage execs to look harder at patenting, after all if they license a third party at 10% it looks like the third party will only pay 10% on any profits relating to the patented product, so in essence the licence will cost the licensee nothing.This tax will also apply to foreign patents where the capital flows to the UK. Patenting is international and today both the searching and filing can all be done online.The high fees attorneys charge may be worth paying if you are a corporate and have to employ somebody to do the patenting anyway, but if you are an individual, substantial attorney fees running into thousands, create a very significant barrier. A complete UK patent actually only costs £230 in total, the UK IPO is amazing and fantastically helpful and it is now entirely possible to patent internationally yourself from your laptop, if you know how to go about it. The difficult bit is having something to patent and understanding what is and isn’t patentable. A great cheap Amazon ebook, which tells you how to go about patenting internationally, step-by-step, is DIY Patent Online. It lists all the fees and has links to all the sites you need plus you can read some of it free on Amazon. They also have a web site and unlike most patent site, which are a cure for insomnia, they aren’t trying to sell you any services. Many spout off about patents knowing little about the subject in reality. The only patent that is really worth it’s salt is a Utility Patent – they even call them utility patents in the States but in the UK they are just called Patents. These must have an 'Inventive Step' and must not be ‘obvious to somebody skilled in the art'. These are not ro be confused with US Design Patents (UK Design Registration) or Australian Innovation Patents. which are easy to get and get around. Patenting is challenging when you don't know how but like everything else, once you have the hang of it, it's quite straightforward. Most businessmen are busy building empires with all the costs involved, these are tangible, you can see them. However my moniker is ‘If you can touch it, don’t touch it’. Intellectual Property is the only thing worth having, owning the IP makes you the master, the rest is just overhead, which is an idea well worth disseminating to your clients.

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