Patent Box is a valuable tax incentive which is intended to increase innovation by encouraging companies to turn their research and development into commercial products. It achieves this by applying a reduced corporation tax rate of 10 per cent to profits that relate directly to patents that the company have developed.
Patent Box has a natural relationship with research and development tax reliefs allowing for valuable tax reliefs at both the development and commercial exploitation of innovation projects.
The benefit of the Patent Box regime can only be formally claimed once a UK or European patent has been granted, however it can apply to profits arising from the date that the patent is pending, subject to appropriate steps being taken.
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