Patent Box
The Patent Box regime allows companies holding qualifying patents to elect to pay a reduced Corporation Tax rate of 10% on profits attributable to those patents. For innovative businesses generating significant income from patented products or processes, the Patent Box can result in substantial ongoing tax savings.
What are the benefits?
Reduced 10% Corporation Tax Rate
Profits qualifying under the Patent Box are taxed at 10%, compared to the standard Corporation Tax rate of 25%. For businesses with significant patent-related income, the ongoing saving can be very significant.
Wide Range of Qualifying Income
Qualifying income includes sales of products incorporating a patent, royalties from licensing patents, income from selling the patent itself, and even damages from patent infringement. The regime is broader than many businesses realise.
Qualifying Patents
UK and European patents qualify, as do patents granted in certain other jurisdictions. Products incorporating multiple patents — even where the patent covers a minor feature — can still qualify for relief.
Interaction with R&D
The Patent Box and R&D tax credits are complementary. A business can claim R&D credits during the development phase and then benefit from the Patent Box once the patent is granted — significantly improving the overall return on innovation investment.
How can Zenus Tax help?
We assess whether your existing or planned patents qualify for the Patent Box
We calculate the qualifying profit attributable to your patents under the nexus formula
We prepare the Patent Box election and ensure it is correctly filed with HMRC
We advise on structuring new IP development to maximise Patent Box eligibility
Frequently Asked Questions
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