Specialist R&D Tax & Grant Funding Advisors

First results from UK Patent Box scheme

The UK Patent Box scheme is a government incentive to support and encourage industrial innovation. The scheme enables companies to apply a lower rate of Corporation Tax to profits earned after 1 April 2013 from patented inventions and equivalent forms of intellectual property. The scheme has been phased in from 1 April 2013 and the full benefit of the Patent Box will be available from 1 April 2017. The lower rate of Corporation Tax under the Patent Box is 10%.

HM Revenue and Customs have published statistics about Patent Box for 2013-14, the first year of operation of the scheme. Patent Box claims were made by 700 different companies, with a total value of £342.9 million. However, just over 32% of the companies making claims were classified as large companies, and their claims accounted for over 95% of the total value of all claims.

Most of the companies claiming Patent Box relief were in the ‘Manufacturing’ sector (445 companies, or 63.6% of the total), or the ‘Wholesale & Retail and Transport’ sector (115 companies, or 16.4% of the total). The region with the highest number of claims under the scheme was the South East (115 claims, or 16.4% of the total) and the region with the lowest number was Northern Ireland (15 claims, or 2.1% of the total).

The value of relief claimed under the Patent Box also varied widely between the UK regions. Companies in London claimed the £196.8 million or 57.4% of the total, which was the highest amount for any region, while companies in the North East claimed £1.6 million or 0.5% of the total, which made it the region with the lowest claim value. As 2013-14 was the first full year of operation for the Patent Box scheme there is no historical data for comparison.

The Patent Box is a new scheme that has the potential to give a further boost to innovative research in the UK,” said Barrie Dowsett, CEO of Myriad Associates. “By allowing this tax break to companies which hold patents on their new products, the UK government is demonstrating its commitment to innovation and R&D,” he added. “It also emphasises the importance and the benefits for companies when they take appropriate steps to protect their intellectual property.”

About Myriad Associates

Myriad Associates are leading experts in helping businesses maximise public funding for their research and development activities through R&D Grants and R&D Tax Credits. If you would like to discuss any aspect of R&D grant funding or R&D tax relief please contact us today for a free, no-obligation consultation. We look forward to hearing from you.