South East companies reminded of patent-related tax relief available
Companies in the south east may not be aware of the patent-related tax relief they may be entitled to, says Nigel Holmes, from global tax services group Ryan.
The so-called Patent Box allows companies to pay a lower rate of corporation tax on profits made from a patented invention and is aimed at encouraging firms to keep and commercialise intellectual property (IP) in the UK.
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It can reduce the rate of tax for most companies to 10% from the standard 25%.
Claims by south east companies under the scheme in 2021/22 fell by 15% to £143 million from the £168 million claimed in 2020/21, while the number of companies claiming in the same period dropped to 225 from 260.
In London, the relief claimed dropped by 10% between 2020/21 and 2021/22 and the number of companies claiming fell to 145 from 160.
Across the UK, the number of companies claiming Patent Box fell 6%, dropping from 1,610 to 1,510 firms. At the same time, the total amount claimed rose from £1.2 billion to £1.4 billion as large companies claimed more tax relief.
"After London, the South East is one of the most innovative regions, and it’s surprising to see the dramatic drop in the amount of tax relief companies in the region are claiming on their inventions," said Holmes.
"Take-up of the Patent Box remains stubbornly low, which suggests that companies may not be aware of what they’re entitled to.
"Patent Box can be a complicated issue to navigate, which is why a large proportion of companies - even accountants - use specialists to make claims.
"If you’ve patented an invention that is bringing in profits, check with a Patent Box specialist to see if you’re in a position to reduce your tax burden," he added.
Ryan is the largest firm in the world dedicated exclusively to business taxes and comprises a multidisciplinary team of more than 4,500 professionals and associates serving over 24,000 clients in more than 60 countries.
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