Patent Box relief statistics: September 2024
Updated 26 September 2024
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This publication is available at https://www.gov.uk/government/statistics/patent-box-reliefs-statistics/patent-box-relief-statistics-september-2024--2
1. Main points
The key findings in this year’s publication are that:
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in the tax year 2022 to 2023, it is provisionally estimated that 1,600 companies elected into Patent Box. This is slightly lower than in the previous year where 1,630 companies elected into Patent Box
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conversely, the value of relief claimed under the Patent Box is estimated to have increased to £1,469 million in the tax year 2022 to 2023 from £1,327 million in the tax year 2021 to 2022. This was primarily driven by large companies claiming more tax relief on average
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of the companies that elected into Patent Box in tax year 2022 to 2023, it is estimated that 25% were classified as ‘Large’ and accounted for most of the relief claimed (94%)
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the number of companies claiming relief varies significantly across UK regions. The area with the fewest number of companies is estimated to have been the North East (2% of the total in tax year 2022 to 2023), and the area with the most companies was the South East (15%); although it is estimated that London-based companies claimed the largest amount of relief (48%). This is based on addresses given to HMRC for tax purposes so may not represent where the economic activity takes place
2. Introduction
About these statistics
This is an Official Statistics publication produced by HM Revenue and Customs (HMRC).
It provides information on the number of companies choosing to elect into the UK Patent Box, the value of the relief from tax year 2013 to 2014 to tax year 2021 to 2022, and projected statistics on relief for tax year 2022 to 2023.
This release includes projected statistics for the tax year 2022 to 2023. The 2022 to 2023 figures will be updated based on a complete set of data in the next annual release (Autumn 2025). The figures have been estimated based on the number of claims that have been made so far, and the previous year’s data of the number of claims that are usually made later in the tax year.
As with the previous publication, all companies who chose to elect into the Patent Box are included in the total company numbers, regardless of whether they have IP profits eligible for Patent Box relief. Section 4.5 details how this affects the statistics.
Section 1 gives a summary of the key Patent Box findings and statistics. Section 3 provides background information regarding the Patent Box. Section 4 provides data broken down by company size, industry sector, UK region and value of claim. Section 5 gives some information on how these statistics have been produced.
The amounts of relief claimed under the Patent Box have been rounded to the nearest £1,000,000, the numbers of companies have been rounded to the nearest 5 and percentages have been round to the nearest 1%. Some data has been suppressed to meet confidentiality requirements. Because of rounding and suppression some breakdown figures and percentages may not add up to provided totals.
These statistics are produced to the professional standards set out in the Code of Practice for Official Statistics (2009). For more information on the statistics produced by public bodies, please visit the UK Statistics Authority website.
HMRC Official and National Statistics can be found on the HMRC statistics gov.uk website.
Who might be interested in these statistics?
This publication is likely to be of interest to policy makers in government, academics, research organisations, international bodies, the media, patent holding businesses and agents.
3. Background of the Patent Box relief
The UK Patent Box was introduced in the Finance Act 2012, effective from 1 April 2013, having been announced in the 2010 Corporate Tax Roadmap. It applies a lower rate of Corporation Tax (10%, as compared with a main rate of 19% in tax year 2022 to 2023) to profits attributable to patents and equivalent forms of intellectual property (IP). This is delivered by an additional deduction, based on the level of IP profits so that the benefit to the company is equivalent to that of a lower rate. The benefit was phased in, with companies fully benefitting from the 10% rate from 2017 to 2018.
The aim of the Patent Box is to provide additional incentive for companies to:
- increase the level of patenting of IP developed in the UK, and ensure that new and existing patents are further developed and commercialised in the UK
- manufacture and sell those innovative products and services from the UK
- locate the high-value jobs associated with the development, manufacture and exploitation of patents in the UK
In 2016 the government made changes to the design of the Patent Box to comply with a new international framework for preferential tax regimes for IP set out by the Organisation for Economic Co-operation and Development (OECD).
This means that the amount of profit from an IP asset which can qualify for the reduced 10% rate of Corporation Tax available through the Patent Box will depend on the proportion of the asset’s development expenditure incurred by the company.
Companies must notify HMRC if they wish to elect into the Patent Box. This must be done within 2 years after the end of the accounting period in which the relevant profits and income arise. Given this time lag, a complete set of data for the period 1 April 2021 to 31 March 2022, known as the 2021 to 2022 fiscal year, has only recently become available. These figures are updated from last year’s release and the latest year of tax year 2022 to 2023 have been estimated using the claims that have currently been made for that period.
4. Distribution of Patent Box data
4.1 Distribution by year
In the tax year 2022 to 2023, it is estimated that 1,600 companies elected into Patent Box, slightly lower than the 1,630 companies in the previous year. The total value of relief claimed under the Patent Box went up from £1,327 million in the tax year 2021 to 2022 to an estimated £1,469 million in the tax year 2022 to 2023. This was primarily driven by large companies claiming more tax relief on average.
Since its introduction, the value of relief has increased as the rate has been phased in, except relief claimed in the tax year 2021 to 2022. The COVID-19 pandemic is believed to have impacted the ability of elected companies to profit from their eligible IP. Although the pandemic presented an opportunity for certain elected companies to commercialise their innovations, others were negatively impacted by pandemic restrictions and the net effect was a fall in the total value of the Patent Box relief.
Based on current projections, the total value of the relief is expected to grow in tax year 2022 to 2023. The number of companies choosing to elect into the Patent Box increased in tax year 2021 to 2022, and, we expect this number to drop marginally in tax year 2022 to 2023, though this number is based on partial data and is subject to change when the complete dataset is available.
Figures 1 and 2 below display the total volume of companies by sector choosing to elect into the Patent Box and total value of claims from tax year 2013 to 2014 to tax year 2022 to 2023. Figures for tax year 2022 to 2023 are projections. Figure 1 shows a steady increase in the number of companies choosing to elect into the Patent Box from tax year 2013 to 2014 to the tax year 2017 to 2018, after which the increase in companies is more gradual. There is a slight drop in the number of companies in tax year 2022 to 2023. Figure 2 shows an increase in the total relief claimed from Patent Box from tax year 2013 to 2014 to tax year 2022 to 2023 with a small drop occurring in the tax year 2020 to 2021. Both figures show the 3 sectors with the highest number of companies and claiming the most relief are; Manufacturing, Professional, Scientific and Technical Activities, and Information and Communication.
Figure 1: Number of companies choosing to elect into the Patent Box by sector from 2013-14 to 2022-23 where 2022-23 is a projection.
Figure 2: Total amount of relief claimed by sector from 2013-14 to 2022-23 where 2022-23 is a projection.
4.2 Distribution by company size
In tax year 2022 to 2023, it is estimated that large companies claimed 94% of the relief, representing 25% of the elected companies. This is comparable to tax year 2021 to 2022, when large companies claimed 94% of the relief.
Company size breakdowns are based on the European Union Enterprise Size Classification (see Annex A), and a full table of results by company size can be found in Annex B.
4.3 Distribution by industry sector
Many companies that undertake research and development also manufacture and/or sell their products either wholesale or retail, which explains the contribution of these sectors to the Patent Box; in tax year 2022 to 2023, an estimated 41% of the total amount claimed is estimated to have been claimed by groups in the manufacturing sector. Research and development is expected to be common within the ‘Professional, Scientific and Technical’ sector, with groups in this sector making up 14% of the total relief claimed in tax year 2021 to 2022. Compared to tax year 2021 to 2022, projected figures suggest these sectors combined will continue to make up a majority of both the number of elected companies and the total relief.
These sectors are based on the Standard Industrial Classification (SIC) 2007. More details on the SIC 2007 can be found in Section 5. Full sector breakdowns can be found in Annex B.
Entities can sometimes be reclassified between releases, which means that a company, and the claim value associated with that company, may appear in a different sector in this year’s release compared to previous publications.
4.4 Distribution by region
In tax year 2022 to 2023, it is projected that London-based companies claimed the largest amount of relief (48%). Similarly, London companies claimed the largest amount of relief (42%) in tax year 2021 to 2022.
The geographic breakdowns shown in this section are based on the UK Government Office Regions (see Section 5 for more information). When interpreting these statistics, it should be noted that companies can have a single address for tax purposes (for example, a headquarters location) even though they may have operations across the UK. This analysis is based on taxpayers’ addresses given to HMRC for tax purposes so may or may not represent where the economic activity takes place. As such they should be treated with caution.
4.5 Distribution by claim size
In tax year 2022 to 2023, it is estimated that the top 285 companies (by the value of the relief they claim each year) accounted for more than 97% of the relief. 170 companies that had elected into the Patent Box claimed no relief in the same fiscal year, approximately 11% of the total.
5. Information on these statistics
Data sources and reliability of the estimates
The Patent Box statistics in this release are compiled using data collected from electronically filed company tax returns. The Corporation Tax computations, where companies are elected into the Patent Box, are submitted to HMRC in iXBRL (electronic) format. This allows companies to electronically ‘tag’ their Patent Box claim so that the number and value of each claim can be extracted automatically.
Tagging errors
Some Patent Box claims do not have the correct iXBRL ‘tag’ applied to them. Further review and scanning of tax computation documents was therefore required to identify computations containing relevant terms such as ‘Patent Box’ or ‘Patent Relief’ that would otherwise be missed.
HMRC is currently working to improve and extend its electronic text reading capabilities to routinely ‘read’ all documents submitted as part of the company tax return. While this will make it easier to find Patent Box claims in future, we expect there to be little impact on the figures provided in this publication because of the manual review work and extra quality assurance undertaken in preparing the statistics.
All of the tax computations identified via the iXBRL ‘tagging’ or text reading processes outlined above were then manually reviewed to:
- ensure that the tags were used correctly for Patent Box claims
- extract the value of the claim if found by text reading and confirm the position in other years where there was no apparent claim
- ensure that when amendments to returns were made only the difference in amounts was recorded to avoid double counting
Industry sector information
Companies in HMRC’s data are allocated a Standard Industrial Classification (SIC) 2007 code that best describes a company’s primary economic activity.
However, some companies engage in more than one type of economic activity. The industry sector breakdown in this publication does not necessarily indicate where a company’s research and development activity takes place. For example, a company primarily doing manufacturing (and therefore allocated to the ‘Manufacturing’ sector) could also have a branch undertaking research and development activity in the ‘Scientific’ sector. For this reason, the industry sector information should be viewed as only a broad picture as to where activity takes place.
Geographic information
The geographic information in this publication is based on the addresses given by companies elected into the Patent Box. The location of this address is not necessarily where a company’s research and development, manufacturing, or other activity takes place. Companies provide a Registered Office address to HMRC for communication purposes but can have business activities located in other UK regions.
Revisions to published information
The Patent Box figures are subject to revision. Although the majority of returns are finalised within 2 years of the end of the company’s accounting period, there are exceptional cases which can take longer. As a result, there is no specific point at which data for the latest year can be considered as complete and final. In practice, the statistics are revised to replace any figures marked as provisional in the previous release of the statistics. However, where the revision to a year is particularly small and would lead to the potential disclosure of individual companies, these revisions will be suppressed (based on our standard approach to statistical disclosure control) until a subsequent release.
Planned developments and changes
Frequency of publication
HMRC plans to publish these Patent Box statistics annually as each year of data becomes available from company tax returns.
Statistics alignment
Because of the way the Patent Box is designed, a complete set of annual data of the relief for any given year becomes available only after 2 years from the end of that given year. In the past this has meant that Patent Box statistics lag by at least 1 year compared to other tax statistics produced by HMRC.
To align Patent Box statistics with the rest of HMRC publications we have published provisional projected statistics for tax year 2022 to 2023 based on claims made up to and including June 2024. This is based on analysis of Patent Box claims made for previous fiscal years which shows that, on average, 90% of Patent Box claims are made by the end of June on the second year after the end of the accounting period. The statistics will be updated based on the complete set of Patent Box claims relating to tax year 2022 to 2023 in the next annual release (planned for Autumn 2025).
User engagement
HMRC is committed to providing impartial quality statistics that meet our users’ needs. We encourage our users to engage with us so that we can improve our National and Official Statistics and identify gaps in the statistics that we produce. Please see the HMRC Statistics ‘Continuous User Engagement Strategy’.
If you would like to comment on these statistics or have any enquiries, please use the statistical contacts named at the end of this section and on the cover page.
UK Statistics Authority assessment
This publication has yet to be assessed for compliance with the Code of Practice for Official Statistics by the UK Statistics Authority (UKSA). This means that the figures in this publication are not yet classified as National Statistics, but as Official Statistics.
UKSA is an independent body directly accountable to Parliament with the overall objective to promote and safeguard the production and publication of official statistics. It is also required to promote and safeguard the quality and comprehensiveness of official statistics and good practice in relation to official statistics.
Please refer to UKSA’s website for more details about the assessment process:
We aim to ready this publication for UKSA assessment in the future.
Contact points
Enquiries about these statistics should be directed to J Hogg
For enquiries relating to the Patent Box policy please contact J Williams
Media enquiries should be directed to the HMRC Press Office contacts listed on the front page of this release.
For general or other enquiries please refer to the HMRC statistics website.
6. Annex A: Company size definitions
The size of a company is based on the European Union Enterprise Size Classification as shown in the following table:
Table 1: Company size definition table
| European Union Enterprise Size Classification | Turnover (€ million) | Total assets (€ million) | Number of employees |
|---|---|---|---|
| Micro | 2 | 2 | 9 |
| Small | 10 | 10 | 49 |
| Medium | 50 | 43 | 249 |
| Large | >50 | >43 | 250+ |
The values shown are upper limits (except for the ‘Large’ category). To be classified as a certain size, a company must meet the employee limit and one or other of the turnover and total assets limits. Information on turnover, total assets and number of employees comes from various internal and external sources. Where this information is missing companies have been grouped into the ’Unknown’ category.
7. Annex B: Publication tables
Notes to the Tables:
If the proportion of later returns are the same as in previous years, then the total value of claims for tax year 2022 to 2023 is likely to be around £1,469 million.
The number of companies refers to the number of companies that have elected into the Patent Box, regardless of whether they have IP profits eligible for Patent Box relief. Amounts of the relief have been rounded to the nearest £1,000,000, the number of companies have been rounded to the nearest 5 and percentages have been round to the nearest 1%. Figures might not add up to totals, and percentages may not add up to 100% due to this rounding.
The next update of these tables is planned for Autumn 2025. This will provide revised figures for tax year 2022 to 2023 and provisional statistics for tax year 2023 to 2024.
Table 2: Claims by year
| Year | Number of companies | Amount of relief claimed (£ million) |
|---|---|---|
| 2013-14 | 835 | 376 |
| 2014-15 | 1,175 | 658 |
| 2015-16 | 1,295 | 770 |
| 2016-17 | 1,425 | 1,047 |
| 2017-18 | 1,545 | 1,142 |
| 2018-19 | 1,575 | 1,164 |
| 2019-20 | 1,600 | 1,240 |
| 2020-21 | 1,610 | 1,196 |
| 2021-22 | 1,630 | 1,327 |
| 2022-23 (projection) | 1,600 | 1,469 |
Table 3: Patent Box data by company size 2021-22
An X in square brackets (‘[x]‘) indicates figures have been suppressed to meet confidentiality requirements.
| Company size | Number of companies | Number of companies as a percentage of total | Amount of relief claimed (£ million) | Amount of relief claimed as a percentage of the total claimed |
|---|---|---|---|---|
| Large | 450 | 27% | 1,252 | 94% |
| Medium-sized | 430 | 26% | 49 | 4% |
| Small | 430 | 26% | 20 | 2% |
| Micro | 315 | 19% | 4 | <1% |
| Unknown | 15 | 1% | [x] | [x] |
| Total | 1,630 | 100% | 1,327 | 100% |
Table 4: Patent Box data by company size 2022-23 (projection)
| Company size | Number of companies | Number of companies as a percentage of total | Amount of relief claimed (£ million) | Amount of relief claimed as a percentage of the total claimed |
|---|---|---|---|---|
| Large | 410 | 25% | 1,387 | 94% |
| Medium-sized | 435 | 27% | 48 | 3% |
| Small | 415 | 26% | 24 | 2% |
| Micro | 320 | 20% | 7 | <1% |
| Unknown | 25 | 1% | 3 | <1% |
| Total | 1,600 | 100% | 1,469 | 100% |
Table 5: Patent Box data by industrial sector 2021-22
An X in square brackets (‘[x]‘) indicates figures have been suppressed to meet confidentiality requirements.
| Standard Industrial Classification | Number of companies | Number of companies as a percentage of total | Amount of relief claimed (£ million) | Amount of relief claimed as a percentage of the total claimed |
|---|---|---|---|---|
| A. Agriculture, Forestry and Fishing | 25 | 2% | 2 | <1% |
| B. Mining and Quarrying | 10 | <1% | [x] | [x] |
| C. Manufacturing | 1,005 | 62% | 560 | 42% |
| D. Electricity, Gas, Steam and Air Conditioning Supply | [x] | [x] | [x] | [x] |
| E. Water Supply | 15 | 1% | [x] | [x] |
| F. Construction | 55 | 3% | 4 | <1% |
| G. Wholesale and Retail Trade | 175 | 11% | 68 | 5% |
| H. Transportation and Storage | 5 | <1% | [x] | [x] |
| I. Accommodation and Food Service Activities | [x] | [x] | [x] | [x] |
| J. Information and Communication | 70 | 4% | 162 | 12% |
| K. Financial and Insurance Activities | [x] | [x] | [x] | [x] |
| L. Real Estate Activities | [x] | [x] | [x] | [x] |
| M. Professional, Scientific and Technical Activities | 130 | 8% | 180 | 14% |
| N. Admin | 80 | 5% | [x] | [x] |
| O. Public Admin, Defence and Social Services | [x] | [x] | [x] | [x] |
| Q. Human Health and Social Work Activities | 10 | 1% | 1 | <1% |
| R. Arts, Entertainment and Recreation | 5 | <1% | [x] | [x] |
| S. Other Service Activities | 20 | 1% | 8 | 1% |
| Unknown | 10 | <1% | [x] | [x] |
| Total | 1,630 | 100% | 1,327 | 100% |
Table 6: Patent Box data by industrial sector 2022-23 (projection)
An X in square brackets (‘[x]‘) indicates figures have been suppressed to meet confidentiality requirements.
| Standard Industrial Classification | Number of companies | Number of companies as a percentage of total | Amount of relief claimed (£ million) | Amount of relief claimed as a percentage of the total claimed |
|---|---|---|---|---|
| A. Agriculture, Forestry and Fishing | 30 | 2% | 2 | <1% |
| B. Mining and Quarrying | 5 | <1% | [x] | [x] |
| C. Manufacturing | 975 | 61% | 609 | 41% |
| D. Electricity, Gas, Steam and Air Conditioning Supply | [x] | [x] | [x] | [x] |
| E. Water Supply | 10 | 1% | [x] | [x] |
| F. Construction | 65 | 4% | 4 | <1% |
| G. Wholesale and Retail Trade | 160 | 10% | 84 | 6% |
| H. Transportation and Storage | 10 | <1% | [x] | [x] |
| I. Accommodation and Food Service Activities | [x] | [x] | [x] | [x] |
| J. Information and Communication | 60 | 4% | 124 | 8% |
| K. Financial and Insurance Activities | [x] | [x] | [x] | [x] |
| L. Real Estate Activities | [x] | [x] | [x] | [x] |
| M. Professional, Scientific and Technical Activities | 130 | 8% | [x] | [x] |
| N. Admin | 80 | 5% | [x] | [x] |
| O. Public Admin, Defence and Social Services | [x] | [x] | [x] | [x] |
| P. Education | [x] | [x] | [x] | [x] |
| Q. Human Health and Social Work Activities | 15 | 1% | <1 | <1% |
| R. Arts, Entertainment and Recreation | 5 | <1% | [x] | [x] |
| S. Other Service Activities | 20 | 1% | 5 | <1% |
| Unknown | 20 | 1% | 1 | <1% |
| Total | 1,600 | 100% | 1,469 | 100% |
Table 7: Patent Box data by UK region 2021-22
An X in square brackets (‘[x]‘) indicates figures have been suppressed to meet confidentiality requirements.
| Government Office Region (GOR) | Number of companies | Number of companies as a percentage of total | Amount of relief claimed (£ million) | Amount of relief claimed as a percentage of the total claimed |
|---|---|---|---|---|
| East England | 205 | 12% | 265 | 20% |
| East Midlands | 110 | 7% | 18 | 1% |
| London | 150 | 9% | 554 | 42% |
| North East | 45 | 3% | 11 | 1% |
| North West | 150 | 9% | 68 | 5% |
| Northern Ireland | 65 | 4% | 24 | 2% |
| Scotland | 65 | 4% | [x] | [x] |
| South East | 255 | 16% | 92 | 7% |
| South West | 155 | 9% | 49 | 4% |
| Wales | 65 | 4% | 11 | 1% |
| West Midlands | 170 | 10% | 35 | 3% |
| Yorkshire and The Humber | 175 | 11% | 43 | 3% |
| Unknown | 30 | 2% | [x] | [x] |
| Total | 1,630 | 100% | 1,327 | 100% |
Table 8: Patent Box data by UK region 2022-23 (projection)
An X in square brackets (‘[x]‘) indicates figures have been suppressed to meet confidentiality requirements.
| Government Office Region (GOR) | Number of companies | Number of companies as a percentage of total | Amount of relief claimed (£ million) | Amount of relief claimed as a percentage of the total claimed |
|---|---|---|---|---|
| East England | 195 | 12% | [x] | [x] |
| East Midlands | 105 | 6% | 18 | 1% |
| London | 150 | 9% | 706 | 48% |
| North East | 35 | 2% | 8 | 1% |
| North West | 155 | 10% | 97 | 7% |
| Northern Ireland | 65 | 4% | 13 | 1% |
| Scotland | 65 | 4% | 86 | 6% |
| South East | 240 | 15% | 76 | 5% |
| South West | 145 | 9% | 76 | 5% |
| Wales | 70 | 4% | [x] | [x] |
| West Midlands | 165 | 10% | 42 | 3% |
| Yorkshire and The Humber | 175 | 11% | 32 | 2% |
| Unknown | 40 | 2% | [x] | [x] |
| Total | 1,600 | 100% | 1,469 | 100% |
Table 9: Patent Box data by value of claim 2021-22
An X in square brackets (‘[x]‘) indicates figures have been suppressed to meet confidentiality requirements.
| Value of Claim | Number of companies | Number of companies as a percentage of total | Amount of relief claimed (£ million) | Amount of relief claimed as a percentage of the total claimed |
|---|---|---|---|---|
| £0 | 115 | 7% | [x] | [x] |
| £1 to £2,000 | 135 | 8% | <1 | <1% |
| £2,001 to £10,000 | 275 | 17% | 2 | <1% |
| £10,001 to £25,000 | 260 | 16% | 4 | <1% |
| £25,001 to £70,000 | 295 | 18% | 13 | 1% |
| £70,001 to £200,000 | 235 | 14% | 28 | 2% |
| More than £200,000 | 315 | 19% | 1,280 | 96% |
| Total | 1,630 | 100% | 1,327 | 100% |
Table 10: Patent Box data by value of claim 2022-23 (projection)
An X in square brackets (‘[x]‘) indicates figures have been suppressed to meet confidentiality requirements.
| Value of Claim | Number of companies | Number of companies as a percentage of total | Amount of relief claimed (£ million) | Amount of relief claimed as a percentage of the total claimed |
|---|---|---|---|---|
| £0 | 170 | 11% | [x] | [x] |
| £1 to £2,000 | 105 | 7% | <1 | <1% |
| £2,001 to £10,000 | 265 | 16% | 1 | <1% |
| £10,001 to £25,000 | 270 | 17% | 5 | <1% |
| £25,001 to £70,000 | 270 | 17% | 12 | 1% |
| £70,001 to £200,000 | 235 | 15% | 28 | 2% |
| More than £200,000 | 285 | 18% | 1,423 | 97% |
| Total | 1,600 | 100% | 1,469 | 100% |