Boxing Clever?
One of last month’s Budget announcements which caught the eye was the proposed future increase of the main rate of corporation tax to 25% – a low blow to many profitable businesses!
But there is still a legitimate way of reducing your tax liability, with the Patent Box tax relief scheme fighting your corner at a rate of just 10%.
To benefit from the scheme, a company needs to either own or have exclusive access to relevant intellectual property – this is generally in the form of a UK or European patent, but certain other rights also qualify. As long as the IP covers a fundamental aspect of what you are selling, the rate of tax charged on relevant qualifying IP profits can be reduced by as much as 62%!
Don’t have a patent? If you are thinking about developing any technology that is new, not in the public domain, has an ‘inventive step’ and is capable of industrial application then it may be worth considering it. Patents are not cheap at the outset, but with 20 years of potentially significant tax savings to be made it is a great opportunity to protect your IP and your bank balance at the same time!
Time is of the essence though – the proposed new corporation tax rates take effect on 1st April 2023 and patents are not granted overnight. You might therefore need to move quickly to get in before the bell!
For more information on patent applications and patent box tax relief please do not hesitate to contact hello@yes.tax, and deal a knockout blow to high tax rates today.
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