Advertorial
Did you know that a lower rate of corporation tax can be paid on profits derived from patented inventions? It is a valuable relief, with eligible profits being taxed at just 10%.
The latest statistics however indicate that only around 1500 companies are claiming annually. Why? Perhaps the perceived complexity is putting people off, but the statistics also prove that it isn’t just a system that works for the big boys – the numbers of claims made by companies classified as “large”, “medium”, “small” and “micro” are very similar, between 350 and 400 claims annually in each category.
Absent any other good explanation, it seems to me that simply not enough people know about the scheme, or realise they are eligible to claim. The eligibility criteria are actually reasonably wide, with both patent owners and exclusive licensees able to claim the relief. The company claiming relief does not actually have to have taken part in inventing the invention – “qualifying development” can happen afterwards, to implement the invention in a product.
Taking advantage of the Patent Box does require a certain amount of planning ahead. There does need to be a patented invention and it is essential that a patent must be applied for before the invention is publicly disclosed. Failing to protect innovation at all has consequences extending far beyond tax, of course.
The government recognises this and indeed the whole point of having this tax incentive in the first place is to encourage UK business not only to innovate but to properly protect that innovation. It is a valuable relief and, in our experience, can pay for the cost of obtaining protection many times over. But it will only work if people use it, and people can only use it if they know about it and get patents.
So, if you are working on inventing something – and that really means solving any technical problem in a new way – please feel free to get in touch and we can discuss how to protect not only the invention, but your profit.
By Frederick Noble, British and European Patent Attorney at Albright IP
Albright IP
Pool Innovation Centre, Redruth, Cornwall TR15 3PL
+44 (0)1209 316161
