Survey points to complexities of current Patent Box rules

From April 2013, any profits from inventions that are protected by a UK patent will be taxable at a significantly lower rate of Corporation Tax.

However, the rate of 10 per cent will not actually apply until 2017. Instead, the actual tax rate that will apply to qualifying profits in the coming tax year will be 15.2 per cent, which still compares favourably to the Corporation Tax rate of 23 per cent.

According to Withers & Rogers, this is because the tax reduction will be tapered so the 10 per cent rate will only apply to 60 per cent of the qualifying profits in 2013–2014, rising to the full 100 per cent of profits in 2017.

Overall, the survey revealed that 98 per cent majority of accountants believe that the incoming Patent Box legislation will encourage businesses to invest more in UK-based research and development.

However, 43 per cent of respondents commented that a significant number of businesses are yet to make any preparation for the new legislation and are in danger of not being ready to take advantage of the lower rate from day one.