Innovative businesses in the Midlands are this week being urged to act now in order to reap the benefits of the Government's proposed Patent Box relief.

The call comes from experts from PwC in the Midlands just weeks after an extensive public consultation exercise by HM Revenues and Customs into the new system.

It is proposed that income from patents will be taxed at a reduced rate of ten per cent as opposed to the forecast headline rate of 23 per cent. The ten per cent tax rate will be phased in from April 2013 - a move that is ultimately expected to save UK companies around £1billion a year.

Draft legislation to implement the Patent Box is anticipated to be published by the Government next month (December).

Paul Harris, Senior Manager at PwC in the Midlands, said: "The Patent Box is key to making the tax regime competitive for innovative companies and will help to put the UK back on the map as a top location for innovative industries. It will undoubtedly encourage businesses across a wide range of sectors, such as manufacturing and engineering, to invest in the UK, generating growth and creating jobs.

"Given the new regime is intended to apply to income after April 2013 from any new or existing patents granted, businesses should be reviewing their patents now and consider how their activities may be impacted to ensure they are able to use it to their full advantage."