Intellectual property service
Take advantage of our knowledgeable guidance during the initial stages of patent creation and potential tax benefits, as our service ensures the safeguarding of your precious documents, designs, and concepts for the long term.
What is Intellectual Property
Every company possesses some form of Intellectual Property (IP), which could encompass trademarks, designs, innovations, and various legally owned creations. Intellectual Property associated with your business includes documents, databases, designs, software, symbols, company and product names, as well as any visuals used for promotional purposes.
It is crucial, especially for small enterprises, to prioritize the protection of their intellectual property. If your business is built upon unique intellectual assets and they are replicated, there is a potential risk of losing customers and market share.
How does Intellectual Property lead to tax reliefs?
You have the opportunity to recover the expenses associated with developing, maintaining, and registering your intellectual property (IP). The taxation rules for patents and trademarks vary depending on whether they were generated or acquired before or after April 1, 2002.
For IP created or obtained after April 1, 2002, the tax treatment generally aligns with the financial accounts. This means that any amortization charges reported in the accounts can be deducted for corporation tax purposes. If no amortization charges are recognized, a fixed deduction rate of 4% per year can be applied. The tax benefit is spread out over the lifespan of the IP.
However, if the IP was acquired or established before April 1st, 2002, it is exempt from these tax rules. In such cases, the corporation will only receive tax relief for the original costs incurred when the IP is sold.
Furthermore, the annual revenue costs associated with maintaining your IP may be eligible for tax deductions in the year they are incurred.
Tax relief through The Patent Box
The introduction of the Patent Box on April 1, 2013, brought forth a new tax relief opportunity for corporations. This relief allows qualifying intellectual property (IP) to be subjected to a lower rate of corporation tax, resulting in potential tax savings.
The main purpose behind implementing the Patent Box is to incentivize businesses in the United Kingdom to protect and commercialize their intellectual property. Under this scheme, companies can benefit from a reduced Corporation Tax rate of 10% on profits derived from patented inventions.
It is important to note that the extent of the benefit offered by the Patent Box may be contingent upon the proportion of research and development (R&D) activities that were conducted in the UK. Therefore, it is generally necessary to accurately monitor and record your R&D expenses in relation to the corresponding patent.
Does my business qualify for
Patent Box?
The Patent Box relief is designed for businesses aiming to derive financial gains from patented technologies or other developments safeguarded by intellectual property (IP) rights. The following are the essential requirements to be eligible for the Patent Box:
The company has successfully fulfilled the requirements for qualifying development through their invention or significant contribution to the patented innovation.
Devoting substantial time and effort to either developing the patented innovation or exploring its potential applications;
If a group or IP holding firm actively oversees the patents it possesses, it can reap the advantages of the Patent Box.
The patent, if licensed, must be subject to an exclusive license that grants national exclusivity rights at a minimum.
Why Choose us?
Our expertise extends to various industries, catering to businesses of all sizes, including startups and multinational corporations. Our goal is to help them maximize the advantages offered by tax incentives and achieve success.
We are capable of aiding you in applying for these benefits via your Company Tax Return, resulting in a reduction of your taxable profit and the amount of Corporation Tax you are obligated to pay.
Working with our partner Seed Legals
With a straightforward IP Assignment Agreement, they will safeguard your intellectual property rights and ensure the protection of your ideas, designs, and confidential information.
Taking control of your intellectual property
Prevent conflicts regarding intellectual property by utilizing our template IP Assignment, which clearly establishes ownership of work performed by your startup. Safeguard your valuable documents, designs, and ideas to ensure their protection for future endeavors.
Speak to one of our specialists
Please get in touch with our specialist team to find out more about how we can help you with your Intellectual Property agreement and related tax benefits.
FAQs
What is Intellectual Property Rights (IPRs)?
Intellectual Property Rights bestow exclusive privileges upon the inventor or proprietor to utilize and reap benefits from their intellectual property. Ownership of something created for you or your company is not automatically conferred unless the complete transfer of IPRs has taken place.
What IP rights can be transferred?
There are different types of Intellectual Property rights including:
- Patents
- Copyrights
- Trademarks
- Industrial designs
- Trade secrets
There are also registered and unregistered design rights.
How long does Intellectual Property last UK?
A patent is a form of Intellectual Property right granted to an inventor by the government of a specific country. In the United Kingdom, a patent remains valid for a period of twenty years, subject to the payment of annual renewal fees, and offers protection exclusively within the borders of the UK.
Are you taxed on the sale of Intellectual Property?
Typically, a resident of the United Kingdom is subject to taxation on one-sixth of the sale price over a span of six years, starting from the time when the patent is sold. Alternatively, upon receiving the proceeds from the sale, the inventor (seller) has the option to choose full taxation on the entire capital amount.