Patent Box Tax Relief – Deadline looming

19 April 2018

Recently released data from the European Patent Office shows a significant rise in the amount of businesses successfully obtaining European patents. The number of patents applied for has also increased by around 40% since 2008.

Is your company missing out on Patent Box tax relief?

The tax relief for patent holders is to reduce the rate of tax companies’ pay on the exploitation of that patent. The eligible profits arising from the qualifying intellectual property patent (“IP”) are taxed at an effective tax rate of 10% as opposed to the current Corporation Tax rate of 19%.


Who can claim Patent Box Tax Relief?

Companies that own or license in qualifying IP rights, for which the relevant development conditions are met, are able to elect into the regime to receive the tax benefit. Once the election is made, profits from new and existing IP will be within the regime. Profits generated in periods where a patent is pending can obtain tax relief when the patent is granted.


Which patents are included?

This includes patents granted by the UK, the European Patent office or certain specified European countries.


How do you claim the tax relief?

An election must be made in writing within two years of the first accounting period to which it applies and this will continue until revoked


30 June 2018 Deadline

The Patent Box Tax Relief rules changed as at 30 June 2016 resulting in more onerous compliance requirements.

However, if your company has applied for a patent pre 1 July 2016 and elects into the patent box regime before 30 June 2018 the company can claim the relief under the old rules.

We urge any companies with patent applications or granted patents to get in touch to explore whether this relief is available to you and make the relevant elections before the upcoming deadline.


How can we help you?

  • Determine whether the company will qualify for the Patent Box Tax Relief
  • Draft and submit to HMRC the relevant elections into the regime
  • Calculate the patent box tax relief deduction
  • Input the patent box tax relief into your Corporation Tax computation

For more information please contact Moira Kelly ( or your usual AAB contact.

To find out more about Moria Kelly, click here

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