New scheme: New Patent Box scheme likely to replace existing scheme

Thursday 12th March 2015

Companies eligible for the Patent Box scheme, a preferential tax regime for income arising from qualifying patents, should consider whether to join it before planned changes in 2016.

 

The Government has proposed changes to the Patent Box scheme that will mean the current scheme will close to new entrants on 30 June 2016.

 

The scheme allows companies with income attributable to qualifying patents which 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 existing scheme will be replaced by a new scheme, but the Government has yet to confirm the details.  It is likely the new scheme will be changed to benefit only those companies who carry out their research and development in the UK, and no longer benefit those who just commercialise it there.

 

Transitional provisions will mean those in the existing scheme on 30 June 2016 will continue to enjoy its benefits until 2021.

 

Operative date

  • Now

Recommendations

  • Companies should consider whether they wish to join the existing scheme before 30 June 2016.

 

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Author: Peter Hine

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