HMRC has posted a guide on how UK companies can play less tax on profits from their patented inventions.
From April 2013, any profits from inventions that are protected by a UK patent will be taxable at a significantly lower rate of corporation tax.
The new “patent box” tax rules mean that companies pay a lower of corporation tax on profits earned after 1 April 2013 from patented inventions and other innovations. The relief will be phased in from 1 April 2013, starting at around 15% and falling to 10% by 2017.
In order to receive the tax break companies must also own or exclusively license-in the patents and must have undertaken qualifying development on them.
HMRC has explained how and when companies can claim the patent box tax relief.
Qualifying companies include those that own or licence patents granted by either the UK Intellectual Property Office or the European Patent Office.
In her latest AccountingWEB tax podcast, Anne Fairpo, vice-president at the Chartered Institute of Taxation urged members not to get too excited, as HMRC’s latest guidance on patents didn’t reveal anything new. “It's a skimpy outline that reverts back to the Budget Technical Note for anything interesting,” she said. “There is 'proper' guidance promised for the autumn, but this isn't it.”
About Nick Huber
I’m a specialist business journalist and have a particular interest in tax and technology.