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Patent Box: HMRC guidance

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HMRC has published a guide to the Patent Box regime in FA 2012 s 19 and Sch 2, which allows a company to elect for profits from exploiting patented inventions to be charged at a lower rate of  corporation tax.

Many small to medium sized businesses wrongly assume that ‘it may not be economic’ for them to claim because they believe that ‘the advisory costs they will incur and the administrative burden of filing a claim will outweigh the cash benefit’, according to KPMG

Jonathan Bridges, Associate Partner at KPMG in the UK, said last month that a business with relevant intellectual property profits of £100,000 a year ‘could be looking at a tax saving of around £6k to £12k’.

HMRC's guide sets out who can elect for the Patent Box, which patents are eligible, and how and when to claim. The new regime will be phased in for accounting periods beginning on or after 1 April 2013. Companies licensed to use technology developed by others may benefit if they meet certain conditions.

The guide includes a link to an 83-page technical note and guide to the Finance Bill 2012 clauses.