Patent Box relief passes £2 billion as take-up continues to grow

The value of Patent Box relief has passed £2 billion for the first time, according to the latest statistics from HM Revenue & Customs (HMRC).

HMRC's latest figures show that 1,735 companies elected into Patent Box in 2024/25, up from 1,695 in 2023/24. The value of relief increased by 23% to £2.283 billion, compared with £1.857 billion the previous year.

The figures mark a second consecutive year of stronger growth in the number of companies using the regime, following several years in which take-up remained relatively flat.

Patent Box enables qualifying companies to apply a 10% Corporation Tax rate to profits attributable to patents and certain other forms of intellectual property, compared with the main Corporation Tax rate of 25%.

Value of Patent Box relief continues to grow #

While the number of companies using Patent Box has roughly doubled since 2013/14, the value of relief has increased around six-fold over the same period.

The increase in the main Corporation Tax rate from 19% to 25% in April 2023 is a significant factor in the growing value of the relief. Many companies had accounting periods that crossed the rate change during 2023/24, making 2024/25 the first full year in which the 25% main rate applies across the period.

The latest figures also show that Patent Box relief remains highly concentrated. Large companies represent 28% of those electing into the regime but are projected to receive 95% of the total relief, while the 145 companies receiving the most relief account for 92% of its total value.

Looking beyond the headline figures #

Thomas Gibb, Executive Director and Chief Compliance Officer at Murgitroyd, said:

“The number HMRC can't publish is still the interesting one: how many companies could potentially qualify for Patent Box but haven't elected into the scheme.

“On HMRC's own figures, 185 companies elected in and claimed no relief at all. You don't need a large patent portfolio for Patent Box to be relevant. A single patented feature within a wider product or process can potentially be enough.

“Our view is simple: Patent Box shouldn't start with the tax return. It starts with what you choose to protect, and when.”

For businesses investing in new products, technologies and processes, considering potential Patent Box benefits alongside patent protection at an early stage can help ensure that both the IP and wider commercial opportunities are understood.

Murgitroyd works with businesses to identify potentially patentable innovation and develop patent strategies aligned with their wider commercial objectives.

Find out more about Patent Box and how Murgitroyd can support your business.