34 corporate finance
Patent Box: Making the UK the 'place to be' for innovative businesses
Recent Budgets have promoted innovation to maintain the UK’s position as a world leader in patented technologies, writes Tim Smith of Baker Tilly
The new Patent Box regime provides innovative UK companies with a fantastic opportunity to benefit from reduced rates of corporation tax on profits arising from certain intellectual property (IP) rights.
What is Patent Box?
Patent Box is about trying to attract business to the UK by making it a more favourable location for IP. The key features of the scheme include:
• Profits from qualifying patent interests will eventually be taxed at just 10%.
• These benefits are available in addition to R&D tax credits.
• Patent Box came into effect on April 1. The full benefits will be phased in over the next five years, with 60% of the benefit available in 2013, increasing to 100% in 2017.
What do you have to do to qualify?
If you have a patent you will need to identify the income that has been derived from the patented product. This requires putting systems and processes in place to track this information. You will need to opt into the regime, even whilst the patent is pending, otherwise you will not be able to claim the tax benefit for income arising before the patent is granted.
How quickly can a patent be granted?
Usually a patent application would take between three and five years before the patent is granted. In the meantime a company can sell and market a product that incorporates its IP with patent pending to discourage competitors and allow it to establish a foothold in the market. As a result of the Patent Box, companies may wish to fast track patent applications because the faster the application is granted, the earlier tax relief can be claimed. A UK patent application could, at present, be fast tracked to grant within 12 months.
Does the Patent Box go far enough?
While the Patent Box is of benefit to many businesses, it is questionable whether it goes far enough to help the most innovative UK businesses; high risk start-ups that will not be generating profits from their innovations in the short term.
What you should be doing now?
The Patent Box has been in force
Moore Blatch advises on £85m wireless communications deal
Corporate lawyers from Moore Blatch have been instrumental in the sale of a global communications specialist to commercial, defence and securities giant Cobham in a deal worth up to £85 million.
Legal experts from the regional law firm advised management at Axell Wireless which provides distributed antenna systems and has worked on high-profile projects such as the Olympic Stadium and the Shard in London, the Pentagon in the USA and Burj Khalfia in Dubai.
Axell Wireless, headquartered in Buckinghamshire and operating all over the
world, has 250 employees and designs, develops and supplies innovative technology products and network management tools which complement the technology in Cobham’s existing antenna and communications systems.
Moore Blatch corporate partner Peter Jeffery has worked with Axell CEO Ian Brown for many years and led the deal which also involved the employment, property and commercial teams from Moore Blatch.
“The legal experts at Moore Blatch have been involved every step of the way in what has been a complex deal,’’ said Brown. “Having worked with Peter
and the team for a number of years I knew they had the expertise to drive the deal forward.
“With a number of parties involved it was crucial that our advisers were the ones to ensure the whole deal stayed on track and having all legal expertise under one roof meant a joined up approach to the complexities of such a major sale.’’
Jeffery said he was delighted to be involved in such a high-profile deal. “This was a great team effort with Moore Blatch working closely with all of Axell’s stakeholders and advisers and the buyer to reach a successful conclusion.’’
WestWon acquires residual lease portfolio of General Capital Finance
Leading UK asset finance company WestWon has acquired the residual lease portfolio of General Capital Finance.
Tarun Mistry, the head of leasing and consumer finance advisory services at Grant Thornton UK LLP, led the administration and sale, following the appointment of partners Malcolm Shierson and Daniel Smith as joint administrators of General Capital Finance in 2010.
Under the terms of the sale, WestWon has taken over a lease portfolio that comprises companies and individuals due to pay final instalments in their primary rental period, agreements in their secondary period and the internal collections portfolio.
www.businessmag.co.uk THE BUSINESS MAGAZINE – THAMES VALLEY – JUNE 2013
since April 1. In order to take advantage of the regime it is recommended that you:
- Identify patents in place so that you can claim against them.
- Put systems and processes in place to identify the income that has been derived from the patented product.
- Look at what profit is being generated from your IP to gauge how much tax relief you may be able to claim.
- Speak to a Baker Tilly tax specialist who will be able to advise on the best course of action for your business.
How can Baker Tilly help?
If you own any intellectual property within your business and want to find out how you may be able to benefit from a tax perspective contact me, details below, or your local Baker Tilly tax specialist.
Details: Tim Smith 01256-486815
www.bakertilly.co.uk
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