From 1 July 2021, some of the most fundamental changes to the Patent Box in recent years will apply to companies elected into the regime. The changes will align with the relief available to all new claimants and those with new intellectual property (IP) from 1 July 2016.
The effect of the changes means that all companies, if not already, will move over to the “new” rules and the steps for making a claim, regardless of when the company elected into the regime, will be consistent.
Claims for accounting periods which straddle 1 July 2021 will require a notional split of the period for Patent Box purposes and this potentially makes the calculation of relief much more complex.
The above changes reinforce the complexity of the relief, albeit it can be one of the most beneficial regimes for some companies to reduce their corporation tax payable. HMRC statistics last published in September 2020 suggest the number of companies claiming Patent Box relief and the total value of relief claimed is increasing, however it is an area where professional advice is recommended to assist with a company’s decision to elect into the regime and calculate the tax benefit available.
This post was written by Gemma Thake, Senior Tax Manager. Price Bailey has significant experience with the Patent Box. If you have any questions on the changes being introduced from 1 July 2021 or related to making Patent Box claim, you can contact Gemma using the form below.
We always recommend that you seek advice from a suitably qualified adviser before taking any action. The information in this article only serves as a guide. The authors or the firm can accept no responsibility for loss occasioned by any person acting or refraining from action due to this material.