Patent Box Tax Relief

The Patent Box tax relief scheme allows UK businesses to reduce their effective corporation tax rate to 10% on profits from patented products. At Streets Innovation, we offer end-to-end Patent Box services to help you stay competitive and compliant.

An overview of Patent Box Tax Relief

What is Patent Box Tax Relief?

The UK Patent Box scheme is a powerful tax incentive designed to reward innovative companies that commercialise patented inventions. It allows qualifying businesses to apply a reduced corporation tax rate of just 10% on profits attributable to those patents, a substantial reduction from the current 25% standard rate.

Who is eligible for the Patent Box scheme?

HMRC guidance states that to be eligible for the Patent Box scheme, your company must:

Be liable for Corporation Tax
Receive income from exploiting patented inventions or other qualifying IP
Own or have an exclusive licence in relation to the patent or qualifying IP
Have undertaken qualifying development on the patents and have active ownership

How do businesses claim Patent Box?

To claim Patent Box relief, each business must elect into the scheme by calculating their relevant IP profits before notifying HMRC, either through their tax return computations or with a written notice.

Supporting Patent Box Claims

Securing the benefits of the Patent Box election requires a meticulous and strategic approach. Our Patent Box services are designed to take the complexity out of the process, ensuring your business maximises its tax savings while remaining fully compliant with HMRC regulations.

1. Eligibility Checks

We go beyond simply checking your patents. Our detailed assessments examine your business model, eligibility, intellectual property portfolio, and commercialisation strategy to identify all qualifying patents and associated income streams, from sales of patented products to licensing royalties.

2. Strategy Planning

Our consultants provide strategic advice on how to structure your business and IP portfolio to optimise your Patent Box position. By aligning your commercials, qualifying assets, and tax strategy, we work to maximise the value of your patent-derived income, unlocking the significant financial benefits.

3. IP Audit and Valuation

From patents to trademarks, our IP consultants are experts at understanding, valuing, and leveraging intellectual assets to drive growth, secure funding, and maximise profitability.

4. Patent Box Calculation

Our team of specialists, including Chartered Tax Advisers, have extensive expertise navigating HMRC’s complex “streaming” and “nexus / R&D fraction” rules, ensuring eligible income and costs are accurately identified and allocated to support a robust, compliant claim.

5. Patent Box Report

Our Patent Box specialists will prepare a Patent Box report to be submitted to HMRC, providing robust evidence of your eligibility and mitigating the risk of a compliance check. Aligning to the best practice approach outlined by HMRC within the GfC9, the report will outline your company condition, IP rights, development condition, calculation methodology and more.

6. Claim Submission

Finally, we will guide you through filing your CT600 tax return to claim your Patent Box relief. From detailing patent information and income calculations to cost allocations to nexus / R&D fraction analysis, we’ll ensure your submission is robust and HMRC compliant.

Why Choose Streets Innovation?

When claiming Patent Box relief, accuracy is crucial. At Streets Innovation, our consultants combine financial expertise with technical insights to meticulously craft robust, compliant Patent Box claims.

Technical Expertise

Our deep technical insight allows us to accurately understand even the most complex projects, ensuring your application is technically sound.

Quality Assurance

Our commitment to quality and compliance mitigates unnecessary risk and ensures the highest of standards.

Collaborative Approach

We pride ourselves on building lasting relationships with our clients that allow us to form bespoke strategies that help us achieve your goals.

End-to-End Consultants

From research to on-going grant management, we’re here through each stage of the innovation lifecycle.

Start your Patent Box application today

Book a free consultation with one of our experts and see how the Patent Box scheme can reduce your tax rate to just 10%.

Patent Box FAQs

What is the current Patent Box tax rate in the UK?

Currently, the UK Patent Box tax rate is at 10% versus the standard 25% for Corporation Tax, allowing businesses to unlock greater value from your patented IP.

Can startups claim Patent Box relief?

Yes, so long as your start-up meets the eligibility criteria, you can apply for the Patent Box scheme. However, the tax benefits are only received once your patent is granted and is actively generating income.

Do I need a UK patent to claim Patent Box?

No, the UK Patent Box scheme is also eligible for UK companies that have been granted patents from the:

European Patent Office (EPO)
European Economic Area (EEA)

Additionally, Plant breeders’ rights, plant variety rights and rights similar to patents relating to human and veterinary medicines may be eligible for Patent Box relief.

How long does a Patent Box claim take?

Depending on the complexity of your claim, it can take anywhere from a few weeks to a few months to take your Patent Box application from the initial eligibility checks to your final submission.

What is the difference between R&D tax relief and Patent Box?

In simple terms, R&D claims offer tax relief on the cost of research and development, whilst Patent Box claims grant tax relief on the profits generated by patented inventions. Eligible businesses can claim both R&D and Patent Box tax relief to maximise their returns across the innovation lifecycle.