Patent Box

Patent Box


The Patent Box went live in April 2013. The government wants to encourage high-value growth in UK plc through a competitive tax regime that supports UK R&D from conception to commercialisation. The Patent Box forms a key part of this strategy by encouraging companies to commercialise their Research and Development in the UK, whilst the R&D Tax incentives encourage companies to carry out their R&D in the UK.

The Patent Box allows a 10% tax rate on profits derived from any products that incorporate patents.

1The time is now for Patent Box

Companies need to start work on the Patent Box to identify revenue-generating patents in their product portfolios. Companies will need to identify patents that link directly to scientific and high-tech R&D and innovation.

Qualifying patents will have been granted by an approved patent-granting body. The Patent Box will excludes copyright and trademark products.

Recent changes mean that companies that have not elected into the scheme by 2016 will no longer be able to join the existing scheme.

2Patent Box process

The claim process will necessitate a sequence of steps as follows:

  • Establishing how revenues relate to patented products
  • Develop a strategy to enhance the value of commercialising patented products
  • calculating qualifying Patented income by identifying revenue streams from products incorporating qualifying patents, and any patents generating licence or royalty income
  • calculating the profit generated from this qualifying income,
  • calculating residual profit by deducting routine profit made from routine business activities.
  • assessing the impact of brand and marketing in residual profit by pro-rating patent and non-patent residual profit
  • and finally using the Patent Box formula to identify the net deduction in the tax return.

Patent Box

Patent Box

MMP can conduct a business review of current patenting estate and strategy, challenging how and or if the business and then the company could benefit from a change in patenting strategy.

Provide consulting on sales projections for patented and non-patented products, if it makes sense to engage support from a Patent Agent. Review technology and patents and consult on how best to integrate these strategies into the business plan.

Conduct a Company Patent Box review to assess your eligibility to claim, to identify which existing revenue streams link to qualifying patents, to assess your potential Patent Box benefit and help you with any areas of concern.

MMP has been involved with the Patent Box from the very beginning and is part of the government’s Patent Box working group. We would be delighted to discuss any aspect of the scheme with you.


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