Innovative Sheffield area companies are being urged to cash in on an initiative which will cut their tax liabilities.
Under the Government’s “Patent Box” scheme, designed to encourage new ideas in the workplace, companies producing new product inventions can qualify for a reduced rate of Corporation Tax on related profits, paying ten per cent against a main rate of 21 per cent.
Stephen Charles, tax partner with Sheffield-based independent chartered accountants and specialist business advisers Hawsons, of Glossop Road, said:
“The Government wants businesses to come up with new, innovative ideas to boost the UK economy and the reduced rate is good news for those who are coming up with new products or processes.
“Even if a company patents just one component of a new product, it can claim a tax reduction on profits arising from the whole product.”
“Other income, such as royalty income from licensing the patent, infringement income or even income from selling the patent will also be in the patent box so there is a real incentive for our companies to innovate their way to some really beneficial tax cuts.”