The Knowledge Development Box is a tax relief to reward the time and effort invested in R&D on a company’s Intellectual Property (IP) and also their investment in legally protecting that property by way of patent and other means.
The relief itself entitles companies to a 50% reduction in their qualifying profits i.e. the qualifying profits will be taxed at the 6.25% rate.
A company may claim the Knowledge Development Box relief if it creates a qualifying asset through qualifying R&D and that asset generates income for the company.
A qualifying asset would include:
- Copyrighted software
- An invention that is protected by a qualifying patent
- Other IP created by small companies, that is certified by the Controller of Patents as being patentable, but not patented.
The Knowledge Development Box is applicable for accounting periods beginning on or after 1st January 2016.
At RSM our team of experts are available to discuss the Knowledge Development Box and how it may apply to your business.
We can assist you in your Knowledge Development Box claim by:
- Identifying IP upon which patents and other certifications can be registered
- Help set up internal procedures to capture R&D expenditure on relevant IP