Patent Box

Rewarding your innovation and supporting IP value creation

Intellectual Property value creation and the Patent Box

Intellectual Property (IP) often arises from having undertaken R&D and is one of the most valuable assets a business owns. It is therefore vital to have a defined strategy for both its’ development and protection to ensure the benefit generated is fully maximised. Its’ protection should be at the forefront of any business strategy to ensure this hard work is rewarded, enabling you to increase the marketability of your invention, gain competitive edge and maximise commercial gains.

There is a misconception that the process of identifying, drafting and protecting ideas and novel solutions is time consuming, costly, uncertain and subject to workarounds. However, working with a results-orientated advisor with a proven track record of success and an experienced team of intellectual property experts is invaluable.

Our comprehensive IP services are delivered in conjunction with one of the UK’s leading Patent Attorney firms to ensure the right balance of technical, legal and tax specialists. Our service is predominantly focused on helping our clients invent, protect and commercialise their ideas, combining valuable expertise and offering a unique service.

We deploy the following 3-stage approach:

Invention Phase
Protection Phase
Commercialisation Phase


Intellectual Property is the creation of ideas, knowledge and information (such as inventions, designs, names and images) and is protected by law via trademarks, copyrights, patents and trade secrets, all of which are recognised as intangible assets known as intellectual property rights (IPR), as they provide specific legal rights which protect the IP owner.

IPR Covers Need to apply Maximum duration
20 Years
Literary, musical, artistic works and software
70 Years after death of author
Registered Design
Image - look and feel
25 Years
Registered Trademark
Name, logo
Confidential Information
Unpublished secret information
Database Right
15 Years
Patent Box, Patent box, Innovation Tax

What is Patent Box? 

Patent Box is a tax incentive which enables businesses to pay a reduced corporation tax rate of 10% on profits derived from patented inventions. And with Corporation Tax rates due to rise to 25%, there’s never been a better time to act and review your IP strategy.

To qualify, companies need to own (or exclusively license-in) patents granted by either The UK Intellectual Property Office, The European Patent Office or countries in the EEA, be liable for Corporation Tax and fulfil ‘development’ and/or ‘active ownership’ conditions.

Where a patent has been granted, even where the patented element is minor, all profits arising from product revenues should qualify, providing a written election requesting clearance to claim is made to HMRC.

And whilst a granted patent is required before any benefit can be claimed, seeking election whilst an application is ‘pending’ means the reduced tax rate can be applied retrospectively to profits generated during the ‘pending’ period since the election was made, up to a maximum of six historic accounting periods.

Patent Box

Qualifying IP Income

  • Worldwide income from the sale of product(s) which incorporate a patent, including spare parts

  • License fees or royalties from qualifying IP

  • Any compensation income or damages from the infringement of owned rights

  • The sale and disposal of qualifying IP and rights


Granted Patents

  • Audit of Patent
  • Make a retrospective claim for the last two financial years
  • Patent Box scheme election
  • Make a PB Claim
  • Receive your tax benefit within 42 days of claim submission
Pending Patents

  • Patent Box Scheme election
  • Audit of patent portfolio
  • Track patent income
  • Make a PB Claim
  • Benefit will be received when the patent has been granted
I do not have any patents

  • Audit conducted by out IP team
  • Patent attorney to advise on likelihood of successful patent
  • Prepare patent application
  • Submit and manage ongoing IP
  • Make a PB claim
  • Benefit will be received when the patent has been granted

Our highly skilled and experienced team of intellectual property, technical and taxation professionals work with companies to identify all qualifying activities and associated expenditure. We use a bespoke claim methodology to ensure the claim is legislatively robust and the value of the entitlement is fully maximised and choice of methodology aims to keep time investment to a minimum, ensuring day-to-day business activities are not affected as a result.

As Patent Box can be claimed in conjunction with other schemes such as R&D Tax Credits and Capital Allowances, engaging a specialist who takes a holistic approach will ensure the maximum tax benefit is claimed and incorporated in the company’s tax return.

Start the conversation

To ensure you are receiving the Government funding you are entitled to, speak to Innovation Tax today.

Contact us now for a free consultation.