HMRC has launched a new video explaining the Patent Box, a new tax incentive designed to encourage companies, including small businesses, to develop innovative products.
The Patent Box will allow them to apply a lower rate of Corporation Tax to profits from patented inventions and certain other innovations.
The tax relief will be phased in from 1 April 2013 and the lower rate of Corporation Tax for companies applying will be 10%.
Qualifying businesses are those that make a profit from exploiting patented inventions, and will either own or license-in the patents and will have further developed them.
David Gauke, Exchequer Secretary to the Treasury, said:
“The Government wants to create the most competitive tax system in the G20 and to make the UK the best place in Europe to start, finance and develop a business. The Patent Box is a key initiative to make the UK tax regime competitive for innovative high-tech companies.
“It provides an incentive for them to retain and commercialise existing patents and to develop new, innovative products. Our aim is for this new tax relief to encourage companies to create high-value jobs in the UK and maintain the UK’s position as a world leader in patented technologies.”