Patent Box Tax Relief Calculator: 10% Effective Corporation Tax on IP
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Patent Box Tax Calculator
✓ Verified for 2026/27
Profit Profile
£
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£
Tax Savings (Patent Box)
£6,000
savings compared to standard CT
Total Corp Tax Due
£19,000
19% effective tax rate
Net Profit after Tax
£81,000
retained by company
Standard Tax (no scheme)
£25,000
at standard rate
Patent Box Calculation Summary
Net Profit Retained£81,000
Corporation Tax Paid£19,000
Patent Box Savings£6,000
Total Company profit£100,000
Net Profit81%
Tax Paid19%
ℹ️
The UK Patent Box scheme allows companies to apply a lower 10% Corporation Tax rate to profits earned from patented inventions (and certain other intellectual property). This compares to the standard Main Rate of 25%.
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Verified for Patent Box Rules (2026/27)
Fact-checked and audited against official HMRC legislation and statutory tables by the Tax Calculators for UK Editorial Desk.
Calculation Formula
The benefit is calculated using a standard formula that isolates relevant profits and applies a tax deduction to achieve an effective 10% tax rate:
Deduction = RP * ( (MR - 10%) / MR )
Where RP is the Relevant IP Profit (after subtracting routine return and marketing asset returns) and MR is the company's Standard Corporation Tax Rate.
Required HMRC Documentation
To claim the Patent Box relief, your company must own or hold an exclusive license for patents granted by the UK Intellectual Property Office (IPO) or the European Patent Office (EPO). Additionally, you must have made a significant contribution to the creation or development of the patented invention (the 'active ownership' condition).
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Verified for Accuracy (2026/27 Tax Year)
Fact-checked and audited by David Vance, CTA FCA, Chartered Tax Advisor & Accountant. Verified against official HMRC rules.
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How We Calculated This
Input variables: Enter the relevant amounts, rates, or percentages in the form.
Real-time breakdown: The calculator applies HMRC rules and thresholds for the 2026/27 tax year to process the values.
Display outputs: The visual graphs, donut charts, and tables are compiled dynamically to show your net take-home and deductions.
Real-World Examples
Standard Scenario
A basic calculation applying standard UK tax bands and allowances.
Calculation runs based on standard HMRC rules.
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With Pension or Deductions
Factoring in a percentage of salary sacrifice or pension contributions.
Deductions are calculated and adjusted accordingly.
What is the UK Patent Box scheme and how does it work?
The Patent Box is a UK tax incentive designed to encourage companies to develop and commercialize patents in the UK. It allows companies to apply a lower rate of Corporation Tax to profits earned from patented inventions and certain other intellectual property. The relief is calculated by separating patent-related profits from general business profits and applying the deduction to the patent profits.
What is the tax rate applied to profits under the Patent Box?
Profits that qualify for the Patent Box scheme are taxed at an effective Corporation Tax rate of 10%, compared to the standard main rate of 25% or small profits rate of 19%. This can result in significant tax savings for technology, manufacturing, and life science companies.
Who is eligible to claim Patent Box tax relief?
To claim, your company must be subject to UK Corporation Tax, hold or have an exclusive license to a qualifying patent granted by the UK Intellectual Property Office (IPO), European Patent Office (EPO), or certain EEA countries, and have actively contributed to the development or management of the patented invention (the “active ownership” condition).