Welcome to our new apprentices
November 8, 2023
GIVEN that the North East can point to world-class innovators such as Joseph Swan, William Armstrong and Robert Stephenson in its industrial history, and given the strength of our thriving economy, it might come as a surprise to learn that our region is home to the least number of patents of any part of the UK.
This lack of numbers doesn’t mean the North East’s present day innovators aren’t getting the rewards of their endeavours, as a report commissioned by the British Library in 2010 showed the region came top of a table ranking creative output per person per pound invested in research and development between 2000 and 2009.
However, when innovation is seen as one of the key tools in the sustainable recovery of the UK economy, it’s clear there are opportunities for the region to contribute more, and new tax regulations due to be phased in from next April could be the catalyst.
The neatly named Patent Box will provide a vehicle through which North East businesses can make better commercial use of their intellectual property (IP).
It allows for a corporation tax rate of 10 per cent to be applied to profits attributed to any creation incorporating an invention that is covered by a valid, granted qualifying patent.
This will include sales of patented items or products made using patented processes, or income from products that incorporate a patented element.
In order to obtain the rate reduction, a company must either own a qualifying IP right or exclusive license to it. It must meet the ‘development criteria’ of having at least made a significant contribution to the development of the item, if not having done it themselves, or developing it or a product incorporating it.
If it is secured, this rate reduction will apply to income derived worldwide, it’s worth looking at the potential opportunities for your business to benefit under the Patent Box regulations, and it might even be that you’re doing or using something that would qualify.
Applying for patents can be a time-consuming process.
Stephen Slater is director at RMT Accountants & Business Advisors Ltd