The Patent Box is a Government funded scheme that enables companies to apply a lower rate of Corporation Tax to profits earned from its patented inventions. This lower rate is 10% and applies to profits earned after 1 April 2013.
However,the UK government has been seen as a promoter of attempts through the Organisation for Economic Cooperation and Development (OECD) to stop companies from shifting profits to countries with beneficial tax regimes. The Patent Box scheme has been challenged within the EU as contravening those rules by effectively offering a lower tax rate.
A decision has now been made as to how to progress the scheme going forwards and it will involve considerable changes and watering down.
http://www.bdo.co.uk/services/tax/business-edge-2014/patent-box-changes-ahead
http://www.theguardian.com/business/2014/sep/17/osborne-patent-box-tax-break-g20
