Discover the Power of Patent Box: Maximising Tax Incentives for Your Businesses

As longstanding advisors to businesses across the West Midlands, we’re seeing more business owners questioning how they can truly get ahead in today’s competitive economy, especially those within the manufacturing and construction industry.

Facing the difficult reality of rising labour and operational costs, coupled with a rise in corporation tax in 2023. Many businesses are seeing their profits slump, impacting their ability to invest and innovate.

While you may believe that you have explored every avenue to optimise your business’s performance and profitability, there is one often underutilised tax incentive that could prove immensely beneficial—Patent Box.


What is Patent Box and its Role for Manufacturing Businesses?

For those who work with intellectual property, one of the most underutilised tax incentives is Patent Box.

Patent Box is a tax incentive specifically designed to encourage companies, especially those in the manufacturing industry, to develop and commercialise patented technologies. This incentive was introduced by the UK government in 2013 to provide an attractive tax rate on profits generated from the sales of patented products. Its purpose is to stimulate investment in research and development while ensuring the resulting intellectual property remains within the UK.


The benefits of Patent Box:

We recently worked in partnership with a construction client on their Patent Box application. By leveraging Patent Box, they were able to experience significant benefits such as:

Reduced Corporation Tax: Patent Box allowed our client to apply a lower rate of corporation tax, currently set at 10%, on profits generated from the sale of patented products, processes, or components. This reduction in tax liability provided them with substantial savings.

Increased Investment: With the money saved on their corporation tax bill, our client was able to reinvest those funds into their business. This bolstered their capacity to innovate, engage in product development, and stay ahead of the competition.

Gaining a Competitive Edge: Through the ownership of patented technologies, our client successfully differentiated their products from competitors in the market. This distinction served as a powerful tool, attracting new customers and expanding their market share.

Counteracting Rising Corporation Tax: With the anticipated increase in corporation tax in 2023, a successful Patent Box application can help offset the impact. By utilising the benefits of Patent Box, businesses can reallocate funds into further investment, mitigating the effects of higher tax rates.


Discover the Haines Watts Difference:

Whether you wish to acquire new machinery, foster innovation, or expand your workforce, Patent Box could provide you with the means to do so effectively. Though the process of claiming can feel complex and daunting, it doesn’t have to be that way. At Haines Watts, we can help you to determine whether your manufacturing business is eligible for Patent Box and assist you in making a claim. We’ll be your guiding hand every step of the way.

Unlock the true value of your intellectual property with Patent Box in our guide or contact us today for a personal conversation about how Patent Box could benefit your business.

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