We’d love to find out more about your business and discuss how we might be able to help. Speak to our expert team today.
Patent Box
Rewarding your intellectual property (IP) investment
Partner with the market leading R&D tax specialists and discover how you can amplify the benefits of your innovation with Patent Box tax relief.
Patent Box relief rewards your intellectual property (IP) investment by helping to reduce your Corporation Tax rate on qualifying IP income to 10%. ForrestBrown can help your business unlock the full value of your patentable IP through our full-service consultancy.
As the UK’s leading innovation tax specialist, we are perfectly positioned to map and analyse patent tax relief opportunities alongside your existing R&D activity. Wherever you are in the process, ForrestBrown offers unmatched expertise to secure the funding your innovation deserves.
Fully realise the benefits of your IP
We’d love to find out more about your Patent Box needs as well as your wider business.
Speak to your expert team today.
- Telephone
- 0117 926 9022
Who can claim Patent Box relief?
Patent Box should be considered by businesses who:
- are liable to UK Corporation Tax;
- hold or exclusively license-in a granted UK or European patent; and
- have undertaken qualifying development on this patent.
Who can benefit from Patent Box?
Like R&D tax relief, Patent Box claims are made by businesses in all different types of sectors. HMRC statistics shows that claims made in 2020-21 came from the following sectors:
The value of Patent Box to your business
The benefit a business receives via Patent Box is ultimately dependent on how much of its profits are attributable to its patents.
With the main rate of Corporation Tax rising from 19% to 25% on 1 April 2023, Patent Box offers qualifying businesses a significant tax saving in 2024, resulting in a reduction in Corporation Tax owed.
| Before 1 April 2023 | ||||
|---|---|---|---|---|
| Total trade profits | £1,000,000 | £10,000,000 | £50,000,000 | £100,000,000 |
| Corporation tax due at 19% | £190,000 | £1,900,000 | £9,500,000 | £19,000,000 |
| 50% of profits attributable to IP | £500,000 | £5,000,000 | £25,000,000 | £50,000,000 |
| Corporation Tax due after Patent Box | £145,000 | £1,450,000 | £7,250,000 | £14,500,000 |
| Total benefit | £45,000 | £450,000 | £2,250,000 | £4,500,000 |
| After 1 April 2023 | ||||
|---|---|---|---|---|
| Total trade profits | £1,000,000 | £10,000,000 | £50,000,000 | £100,000,000 |
| Corporation tax due at 25% | £250,000 | £2,500,000 | £12,500,000 | £25,000,000 |
| 50% of profits attributable to IP | £500,000 | £5,000,000 | £25,000,000 | £50,000,000 |
| Corporation Tax due after Patent Box | £175,000 | £1,750,000 | £8,750,000 | £17,500,000 |
| Total benefit | £75,000 | £750,000 | £3,750,000 | £7,500,000 |
Patent Box Claims with ForrestBrown
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1
Establishing eligibility
The first step is to establish that a business is eligible for Patent Box and that it meets the substance requirements of the regime – the active ownership condition and the development condition.
Our project team will undertake an initial assessment so we can understand the fundamentals of your patent position. Once we have established eligibility, our specialists will begin to review the more complex details relating to qualifying expenditure.
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2
Mapping qualifying expenditure
Next, we stream the business’s income and expenditure to determine how its profits map to its relevant product sales, royalties and license fees, patent sales, infringement income and notional royalties on processes or services.
Our team of chartered tax advisers and accountants have the technical firepower to determine the extent to which your profits relate to your IP activity, extracting efficiencies and minimising risk.
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3
Calculating the R&D fraction
Further adjustments are made to track and trace these profits back to R&D activities attributable to its patents. This is the profit that is eligible for the effective 10% rate of tax.
Our sector specialists have in-depth industry experience and have unique insight into how R&D activities are undertaken across a range of sectors. Working with our tax team they help to identify relevant IP income to the level of R&D expenditure incurred to develop IP within a claim or project.
Read more on the Nexus R&D Fraction.
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4
Beyond your claim
ForrestBrown is your trusted partner for best-in-class innovation incentive advice. We’re passionate about the transformative power of Patent Box relief for your business and the wider economy.
Your innovation is unique and so are your business needs. Our approach is consultancy based, meaning we provide a range of services to suit your requirements, including claiming R&D tax credits, Capital Allowances, Grants, HMRC enquiry support, our accountant partner programme and beyond. We don’t take a one-size-fits all approach, and we understand how the wider innovation incentive toolkit open to businesses can be used strategically and successfully.
Amplifying your innovation
Patent Box and R&D tax relief work in synergy to amplify the benefits of your innovation.
Our multidisciplinary team are experts in their field and speak your language. We’d love the opportunity to discuss how we can support your business.
Claiming Patent Box and R&D tax relief
Research and development (R&D) tax relief and the Patent Box work in conjunction with each other, incentivising the full innovation lifecycle of a UK business.
Both are forms of tax relief and the key difference between the two regimes is that R&D tax incentives provide tax relief and / or a credit based on a business’s R&D spending, while patent box provides a lower effective tax rate on profits attributable to UK or certain European patents.
Find out more about combining R&D tax credits and Patent Box relief.
ForrestBrown is the UK’s leading specialist innovation tax adviser. Our expert team is experienced across all R&D intensive sectors. We can quickly understand how your underlying technology, products, projects and processes interlink, meaning we can extract practical efficiencies that expand to fuel the growth of your company or make your project budget stretch further,
We are passionate about the transformative power of innovative incentives for your business and the wider economy.
Our Patent Box team
Our Patent Box advisory team is led by Angela Banerjee, who has over 12 years’ experience advising on innovation incentives, including R&D tax relief and the Patent Box.
Angela previously spent a decade within Big Four and specialist R&D firms in a range of advisory and consulting roles.
Our Patent Box team draws on decades of experience working with innovative businesses across various industries to ensure their investment in intellectual property (IP) is rewarded. We bring together chartered tax advisers, lawyers and technical experts to help you get the most out of your patents.
Success stories
Steve Gardner, Director, Gardner Services
ForrestBrown cut through the complexity to provide the calculations we needed. The team were professional and efficient, overcoming any barriers and providing reassurance that our submission is based on robust methodology.
Private equity backed managed cloud services business
“When we spoke to ForrestBrown, the difference was clear. They’re a specialist team who provide an end-to-end service. They’re flexible and proactive, which makes claiming easy. I’d certainly recommend their service to other businesses.”
Konrad Brodaczewski, Vice-director, Grena Limited
ForrestBrown’s team were knowledgeable which meant we did not have to become experts in the field ourselves. They were helpful in providing us with all necessary information which has made claiming Patent Box relief a very easy and smooth process.
Reward your IP investment
Our approach is rigorous and proactive to ensure your company is able to maximise the retention and commercialisation of its IP through accessing Patent Box tax relief.
We’d love to learn more about your business and discuss how we might be able to help.
- hello@forrestbrown.co.uk