RE: UK Patent Box Regime25 Jan 2021 23:07
When the half year result's came out Novacyt stated - For the first time the Group has been able to benefit from the UK Patent Box Regime, which is a special low corporate tax rate used by several countries to incentivise research and development by taxing patent revenues differently from other commercial revenues. Subject to a number of adjustment's, the effective rate of tax on profit's derived from the sale of product's subject to patent's is close to 10% rather than the normal UK tax rate of 19% .The Patent Box rate is normally claimed once a patent has been granted ,but it is likely the Group's product's will fall within a specific exemption allowing the reduced rate to be claimed immediately. Due to the uncertainty over the detail's of the full calculation, for current reporting purposes a reduced corporation tax rate of 12% on profit's from patented product's has been assumed. Since those result's were released Novacyt have applied for patent's on 16 product's , which were published in the Patent Journal on 02/12/2020 .If Novacyt are successful with this claim for a reduced rate of tax on newly patented product's it will lead to substantial reduction in tax.