Leading accountants Garbutt & Elliott have teamed up with York-based patent attorneys Secerna to create a pioneering one-stop advisory service for the new tax relief opportunities on patents.
Garbutt & Elliott and Secerna have already been appointed to advise Fantas-tak, the Bradford-manufacturer of glue dots and niche adhesive products, on the tax concessions for patents in the last Budget.
Paul Simpson, the managing director of Fantas-tak, believes that significant tax savings can now be made on patents.
“We are currently the leading business in our specific sector in Europe. To remain in pole position, we have to innovate and invest in new products. And we have to patent these products to protect us from our competitors,” he said.
“Chancellor George Osborne’s last Budget attracted a whole series of negative headlines, but he does deserve credit for trying to encourage British companies to innovate by introducing the Patent Box regime.
“We are indebted to Garbutt & Elliott and Secerna for explaining this new regime to us and their on-going advice and support is invaluable.”
Nick Scull, tax partner at Garbutt & Elliott, who have offices in Arabesque House, Monks Cross Drive, York, said: “We are absolutely delighted to be advising a company with a brilliant track record of innovation like Fantas-tak.
“The aim of the Patent Box is to provide an additional incentive for UK companies like Fantas-tak to retain and commercialise existing patents and to develop new innovative patented products.
“Following a phased introduction, companies will be able to pay tax at the rate of ten per cent on qualifying profits that fall within the Patent Box regime. This is a substantial reduction compared with the main rate of corporation tax, which will be 23 per cent when the regime is launched next year.
Mr Scull said the recent changes to the tax regime are tremendous news for Yorkshire businesses, providing a tangible benefit to invest in innovation by significantly reducing the tax burden.
“Apart from Fantas-tak, we are in detailed discussions with a number of other companies, who could potentially save many thousands of pounds in tax to reinvest in the business.”
Jason Boakes, partner with Secerna, said: “This was a radical change in the last Budget, driven by the Government’s desire to encourage innovation and to keep successful companies in the UK.
“In response to this, we have teamed up with Garbutt & Elliott to provide a one-stop Patent Box advisory service, which we believe is unique in the Yorkshire region.
“Working together, we can estimate the potential benefit for a business, perform claim computations and secure clearances for tax relief from HMRC.”
To illustrate the benefits, Mr Boakes said that a company which manufactures and sells 300,000 units of a new innovative product, gaining a net profit of £1.2m, would leave them with a £300,000 bill for corporation tax.
“However, by taking advice on the new patent box legislation, the same company could reduce their corporation tax by as much as £100,000. That is a massive incentive.”