--- title: "Patent Box Tax Relief in Cardiff | Luminaire Accounts" description: "Cut Corporation Tax on profits linked to qualifying patents. We check eligibility, calculate the Patent Box benefit and file the election and claim." canonical: "https://hlsaccounting.co.uk/services/patent-box-tax-relief" --- Tax Services - Business # Patent Box Tax Relief We help innovative Cardiff businesses claim Patent Box tax relief, reducing your Corporation Tax to just 10% on profits from your patented inventions. With nearly ten years of experience serving small businesses across South Wales, we'll guide you through the eligibility checks, calculations and claims process so you keep more of what you've earned. [Book a free consultation](https://calendly.com/hlsaccounting/new-client-meeting) 10% Corporation Tax rate on qualifying profits £1.36bn Relief claimed in 2021-2022 2 years Window to elect into the scheme ![Business professional receives a refund or reduced tax payment from a tax advisor across a desk with an open box of patent documents, calculator, and blank tax forms in a clean office meeting room.](/_next/image?url=%2Fapi%2Fmedia%2Ffile%2Ftax-refund-patent-ip-office-photo.png%3Fv%3D1773064242140&w=1536&q=75&dpl=dpl_DEc4fGhEc1SCRZZutzoEsRuDy1CJ) ## What we cover under Patent Box relief Patent Box sits alongside a range of tax incentives for innovative businesses. We'll help you understand which reliefs you qualify for and how to maximise the benefit. ### Eligibility assessment We'll check whether your patents, development activity and ownership structure meet HMRC's qualifying conditions. ### Qualifying profit calculations Working out the R&D fraction and separating routine profits from IP-derived income, so your claim is accurate and defensible. ### Election and filing Making the formal election within the two-year window and including the relief in your Corporation Tax return. ### Combining with R&D tax credits Claiming both Patent Box and R&D relief where eligible, maximising the tax advantage on your innovation. ## How Patent Box relief works for Cardiff innovators Patent Box is a UK tax incentive that rewards businesses for developing and commercialising patented inventions. If your company owns or exclusively licenses a qualifying patent and meets the development conditions, you can reduce Corporation Tax to 10% on the profits linked to that IP. With the main rate now at 25%, that's a significant saving for businesses doing genuine R&D. The scheme applies to patents granted by the UK IPO, European Patent Office or select EEA offices, covering income from worldwide sales, licensing and related activities. You must meet substance requirements: active ownership of the IP and a qualifying development condition, which means your company carried out a significant amount of the work that led to the patent. > You could be paying 10% Corporation Tax instead of 25% on profits from your patented innovations. More information Claiming the relief involves calculating your qualifying IP profits, applying an R&D fraction if you outsourced development or acquired the patent from a connected party, and making a formal election within two years of the end of the accounting period. The calculations can be complex, especially when separating routine returns and marketing contributions from genuine IP profit, so most businesses benefit from professional support. We work with innovative companies across Cardiff and South Wales, from tech startups in Cardiff Bay to manufacturers in Newport and Bridgend, helping them navigate the eligibility checks and file accurate claims. If you've developed a patented product or process, or you're licensing IP that you own, it's worth exploring whether Patent Box could reduce your tax bill. ### Who qualifies? - Companies liable to UK Corporation Tax - Own or exclusively license a qualifying patent - Meet the active ownership and development conditions - Generate income from the patented invention (sales, licensing, damages) Patent Box can be claimed alongside R&D tax credits, and relief may apply to income from pending applications once the patent is granted, as long as you meet the conditions. The key is acting within the two-year election window and getting the calculations right from the start. If you think your business might qualify, or you're unsure whether your patents meet the criteria, book a free consultation and we'll talk you through the process. We'll review your situation, explain what's involved, and help you decide whether Patent Box makes sense for your company. ### Ready to explore Patent Box? Book a free consultation and we'll assess your eligibility and talk you through the next steps. [Book a free consultation](https://calendly.com/hlsaccounting/new-client-meeting) ### You might also like - [SEIS (Seed Enterprise Investment Scheme) Advice](/services/seis-seed-enterprise-investment-scheme-advice)→ - [Enterprise Investment Scheme (EIS) Advice](/services/enterprise-investment-scheme-eis-advice)→ - [Tax Relief on Business Assets (AIA)](/services/tax-relief-on-business-assets-aia)→ ## Worth considering Tax Services - Business ### HMRC Enquiry & Investigation Support Support with HMRC enquiries and investigations, from the first letter to the final outcome. We organise records, manage deadlines, and deal with HMRC on your behalf. [HMRC Enquiry & Investigation Support→](/services/hmrc-enquiry-and-investigation-support) Tax Services - Business ### Business Tax Planning Plan ahead for Corporation Tax or Self Assessment, forecast what you will owe, and use allowances, expenses and profit extraction sensibly. [Business Tax Planning→](/services/business-tax-planning) Tax Services - Business ### R&D Tax Credits Claim R&D Tax Credits without the stress. We confirm eligibility, calculate qualifying costs, write the supporting report, and submit the claim with your Corporation Tax return. [R&D Tax Credits→](/services/randd-tax-credits) Tax Services - Business ### Corporation Tax Planning Get a clear estimate of your company’s corporation tax, plan director pay and spending, and avoid nasty surprises at year end with practical, plain-English advice. [Corporation Tax Planning→](/services/corporation-tax-planning) Tax Services - Business ### Corporation Tax Returns CT600 and iXBRL preparation and filing for limited companies, with clear tax calculations, allowance checks, and deadline tracking so you stay compliant and avoid surprises. [Corporation Tax Returns→](/services/corporation-tax-returns) ## Before you make a claim Here are the questions we hear most often from Cardiff businesses exploring Patent Box relief. Does my patent have to be granted before I can claim? You can elect into Patent Box while your application is pending, but relief only applies once the patent is granted. You can then claim retrospectively for periods after you made the election, as long as you meet the qualifying conditions. What's the R&D fraction and when does it apply? The R&D fraction reduces your relief if you outsourced qualifying development or acquired the patent from a connected party. It compares your own R&D spend to the total, ensuring the relief reflects the work you actually did in-house. Can I claim Patent Box and R&D tax credits at the same time? Yes. Patent Box reduces Corporation Tax on profits, while R&D tax credits give relief on your development costs. They're separate schemes and can be claimed together if you qualify for both. How much could I save with Patent Box? It depends on how much of your profit is linked to the patented IP. The relief cuts Corporation Tax from 25% to 10% on qualifying profits, so if you're generating significant income from your patents, the saving can be substantial. How long do I have to make the election? You must elect into Patent Box within two years of the end of the accounting period you want to claim for. Miss that window and you lose the relief for that period, so it's worth acting early. Do I need to have done all the R&D myself? No, but you must meet the qualifying development condition, which means you carried out a significant portion of the work that created the patented invention. If you outsourced some development, the R&D fraction will adjust your relief accordingly. What types of income qualify for Patent Box? Income from selling patented products, licensing the IP, selling the patent itself, and damages for infringement all qualify. The relief applies to worldwide income, not just UK sales. How do you calculate the qualifying profit? We start with the income linked to the patent, then strip out routine returns and marketing contributions, leaving the profit genuinely attributable to the IP. If an R&D fraction applies, we adjust the figure accordingly before applying the 10% rate. ## Let's talk about Patent Box Book a free consultation and we'll assess whether your business qualifies and walk you through the claims process. [Book a free consultation](https://calendly.com/hlsaccounting/new-client-meeting)