Patent Box Calculator
Calculate the Patent Box benefit: an effective 10% corporation tax rate on patent profits, scaled by the R&D nexus fraction.
Data verified · July 2026
What rate does the Patent Box give?
An effective 10% corporation tax rate on profits attributable to qualifying patents — delivered as an extra trading deduction rather than a separate rate.
Source: GOV.UK — Corporation Tax: the Patent Box (gov.uk/guidance/corporation-tax-the-patent-box). · updated 2026
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Everything about Patent Box Calculator
📋Overview+
Computes the Patent Box deduction that brings the corporation tax rate on relevant IP profits down to an effective 10% — scaled by the nexus (R&D) fraction: (in-house + unconnected subcontracted R&D) × 1.3, capped at 1, over total qualifying expenditure including connected-party R&D and IP acquisition costs.
💡 Best practices
- The election must be made within 2 years of the end of the accounting period — profits before election get no benefit.
- Heavy IP acquisition or connected-party subcontracting dilutes the nexus fraction and the benefit.
- Loss-making patent portfolios create a Patent Box loss that reduces future relief — timing the election matters.
🔢 Concrete example
£500,000 of relevant IP profits at the 25% CT rate with fully self-developed IP: £300,000 deduction, £75,000 of tax saved — an effective 10% rate on the IP profits.
📖User guide+
How to use this calculator
- 1
Enter the relevant IP profits (net of routine and marketing returns).
- 2
Set your marginal corporation tax rate.
- 3
Fill the nexus inputs: in-house R&D, subcontracted R&D and IP acquisition costs.
- 4
Read the deduction, the tax saved and the effective rate on IP profits.
📚Glossary+
- Relevant IP profits
- Profits attributable to UK or European patents (and some other rights), after removing a routine return (~10% of costs) and the marketing asset return.
- Nexus fraction
- Relief is proportional to your own R&D: (in-house + third-party R&D) × 1.3 uplift, divided by all qualifying expenditure including acquired IP and connected-party R&D — capped at 100%.
ℹ️Sources & updates+
Last data update
July 5, 2026
Sources and references
GOV.UK — Corporation Tax: the Patent Box (gov.uk/guidance/corporation-tax-the-patent-box).
The data in this calculator is updated regularly to reflect the latest official rates. When in doubt, consult the official sources listed above.
FAQ — Patent Box Calculator
What rate does the Patent Box give?+
An effective 10% corporation tax rate on profits attributable to qualifying patents — delivered as an extra trading deduction rather than a separate rate.
Which patents qualify?+
Patents granted by the UK IPO or the European Patent Office (plus some EEA national offices), where the company holds or exclusively licenses the patent and has developed it.
What is the nexus fraction?+
A ratio ensuring relief follows real R&D activity: your own and unconnected subcontracted R&D (with a 30% uplift) divided by total qualifying expenditure including acquired IP — capped at 1.