Boxing clever: Patent box – maximising the benefits
AS part of the Government's aim to encourage UK innovation and increase tax competitiveness a 10% Corporation Tax rate for profits arising from patented technology in being introduced with effect from 1 April 2013.
The Patent Box regime applies in many cases to worldwide profits, derived from UK and European patents, and only needs one patent in a product for the whole product to qualify.
Getting the most from the Patent Box requires careful planning. Companies must ensure they're ready by 1 April 2013 to minimise the risk of losing the benefits. Focus should be given to three key areas:
Eligibility — A company qualifies if it has ownership (either registered owner or an exclusive licence) of patents, and it has performed qualifying development or has responsibility for ongoing decision making on the development and exploitation of the IP.
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Valid until: Sunday, May 26 2013
Computation —There's a three stage calculation to determine how much of a company's profit will qualify. Qualifying profits include worldwide sales of products containing a patented invention, royalties and income from the licensing, sale of patents, and the exploitation of a process patent in a supply of services. The overall benefit will depend on the company's profit margin and that of the patented products.
Planning for the Patent Box – Further optimisation may require examining other areas, for example, a review of group licensing arrangements to ensure qualifying Rights are in the UK; if certain innovations have not been patented but could be, then early action could bring more profits into the regime.
If you would like to find out more, PwC are holding a seminar on the 18 September at the Vale Hotel & Golf Resort. To register interest or for more information, please contact Tracey Gaughan on 029 2080 or email tracey.k.gaughan@uk.pwc.com.
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