Patent Box relief reaches £2.3 billion

HMRC’s latest Patent Box statistics show that the value of the relief continues to grow, with an estimated £2.283 billion of relief in 2024/25*, up from £1.857 billion the previous year.

Despite this, relatively few UK companies are using the regime. HMRC estimates that 1,735 companies elected into Patent Box in 2024/25. Use is also heavily concentrated among larger businesses, which account for the vast majority (95%) of the total relief claimed.

Patent Box enables qualifying profits from patented inventions and certain other intellectual property to benefit from an effective 10% Corporation Tax rate, compared with the main rate of 25%.

For businesses investing in R&D and developing new technology, products or processes, the figures provide a useful prompt to consider whether Patent Box could form part of their wider tax and innovation strategy: could the intellectual property being created also qualify for Patent Box?

R&D tax relief and Patent Box can work alongside each other, helping businesses realise greater value from their investment in innovation. While R&D tax relief supports investment in developing new or improved products and processes, Patent Box can reduce the Corporation Tax payable on qualifying profits generated from patented innovations.

If you are keen to know more about Patent Box then get in touch with ABGi. Our acknowledged experts in the tax incentive space are ready to discuss your suitability.

*  2024/25 figures are HMRC projections based on deductions made so far and will be updated in Autumn 2027. (source – gov.uk)