ICAEW.com works better with JavaScript enabled.

New scheme: Eligible companies reconsider Patent Box tax regime following changes to benefits under it

Companies eligible for the Patent Box scheme, a preferential tax regime for income arising from certain patents, should consider whether new rules mean it is still worth trying to benefit from it. The changes will apply from 1 July 2016.

Legal Alert

This update was published in Legal Alert - July 2016

Legal Alert is a monthly checklist from Atom Content Marketing highlighting new and pending laws, regulations, codes of practice and rulings that could have an impact on your business.

The Government has introduced changes to the Patent Box scheme which allows companies with income attributable to certain patents they either own, or have an exclusive licence to commercialise, to pay only ten per cent corporation tax on that income, rather than the much higher standard rates.

The most important change is that from 1 July, the amount of profit attributable to the patent depends on the percentage of the expenditure incurred by the company in developing it. This will mean the benefits for some companies will be reduced.

Transitional provisions mean those already in the scheme at 30 June 2016 continue to enjoy its previous benefits until 2021.

Operative date

  • Now

Recommendations

  • Eligible companies should consider whether they wish to join the revised scheme, given the changes made to it

Disclaimer: This article from Atom Content Marketing is for general guidance only, for businesses in the United Kingdom governed by the laws of England. Atom Content Marketing, expert contributors and ICAEW (as distributor) disclaim all liability for any errors or omissions.

Copyright © Atom Content Marketing