Many start-ups are keen to save money on their taxes. Why would you want to pay more tax than necessary? In the early days of any company, conserving cash and boosting profits is the way to go. No one wants to spend unnecessarily.
Did you know that you can save money on your corporation tax by using the patent box system? This may all sound like jargon to you, so let’s delves a little deeper and found out if this is a scheme for you.
An Overview of the Patent Box
The project was set up in April 2013 in the UK. This was to encourage businesses and high-value growth within the world of business. Due to the economic slump, the government decided to implement schemes to assist business. This was done to encourage UK businesses to retain their business within the UK. Much of this is done to support research and design and to ensure that the products are commercialised. All of this process has to be done within the UK to see maximum return and tax breaks. After all, there has been something of a technology drain in the UK. This scheme ensures that the technologically gifted are utilised the UK as their base.
If you own a tech startup, this could be an excellent way to save money on your dreaded tax bill.
How Much Can I Save?
Through the patent box scheme, you can save a 10% tax rate on profits from products that use your patent. In short, you can save a substantial amount on your corporation tax and ensure that you are maximising your profits in a real way. You can find out more patent box info from London IP.
So, Can My Business Benefit From the Patent Box?
Does your company pays corporation tax, and you have a business that profits from using patented inventions? If so, you will qualify for the Patent Box Scheme. Your company must hold relevant licenses, and you must have initiated the research and design phase of the project.
But, you must ensure that you are not claiming for all of your company’s profit. You must ensure that you have the relevant intellectual property documentation. This is so that you can qualify for the tax breaks. After all, these profits only makeup a small part of your business.
For it to be relevant to your intellectual property income, your profit must come from one of the following ways:
- Selling a patented product
- Licensing of your patent product
- Selling patent rights
- Infringement income
- Damages
- Insurance
- Manufacturing
Having a great business idea and using it within the UK can save you some serious cash on your tax bill. You don’t have to be at the behest of others or the tax system. For many, this incentive is proving to be popular and profitable.
There are phases to this scheme that are going to be rolled out until 2017. So, you have plenty of time to gather your evidence and claim on this fantastic incentive. The Patent Box can save you a tremendous sum of money for the long term.
