2024 Patent Box Statistics
The latest Patent Box Statistics for 2022-2023 have just been released, providing some critical insights into how UK businesses are benefiting from IP-related tax relief. Here is a summary of the key insights:
1. Slight Decline in Number of Claimants
- The number of companies claiming Patent Box relief fell to 1,600 in 2022-2023, down slightly from the previous year. Despite this small drop in participation, the total value of relief claimed increased by 10.7% to £1.47 billion, showing that the scheme is still delivering significant benefits to those who engage with it.
2. Increasing Value of Claims
- With the rise in Corporation Tax from 19% to 25% as of April 2023, the Patent Box’s reduced tax rate of 10% on qualifying IP profits is now even more valuable. Companies with patents can see substantial tax savings by keeping their IP within the UK. This is particularly beneficial for businesses in sectors like manufacturing and technology, where incremental innovations often lead to large-scale profits.
3. Sector and Regional Impact
- The majority of Patent Box claims continue to come from industries such as manufacturing and pharmaceuticals, which rely heavily on IP protection. Regionally, claims are still concentrated in the Southeast and London, reflecting where many high-tech businesses are based. However, the Patent Box offers opportunities for innovative firms across the UK to gain a competitive edge.
4. Missed Opportunities for SMEs
- Despite its advantages, awareness and usage of the Patent Box among SMEs remain low. Many businesses are missing out on potential tax savings because they believe the process of patenting their innovations is too complex or costly. In fact, even minor technical improvements to a product can sometimes lead to an opportunity to patent the solution and benefit from Patent Box Tax Relief.
Key Takeaway: The Patent Box incentive continues to be a powerful tool for reducing tax on profits from patented inventions. As Corporation Tax rates increase, now is the time for companies, especially SMEs, to evaluate their IP and explore how they can benefit from this relief. If your business is innovating, you should consider whether the Patent Box could boost your bottom line.
Link to detailed Patent Box Statistics: https://www.gov.uk/government/statistics/patent-box-reliefs-statistics/patent-box-relief-statistics-september-2024
| 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+ |
| 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 |
| 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 | |
| Unknown | 15 | 1% | [x] | [x] |
| Total | 1,630 | 100% | 1,327 | 100% |
| 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 | |
| Unknown | 25 | 1% | 3 | |
| Total | 1,600 | 100% | 1,469 | 100% |
| 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 | |
| B. Mining and Quarrying | 10 | [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 | |
| G. Wholesale and Retail Trade | 175 | 11% | 68 | 5% |
| H. Transportation and Storage | 5 | [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 | |
| R. Arts, Entertainment and Recreation | 5 | [x] | [x] | |
| S. Other Service Activities | 20 | 1% | 8 | 1% |
| Unknown | 10 | [x] | [x] | |
| Total | 1,630 | 100% | 1,327 | 100% |
| 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 | |
| B. Mining and Quarrying | 5 | [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 | |
| G. Wholesale and Retail Trade | 160 | 10% | 84 | 6% |
| H. Transportation and Storage | 10 | [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% | ||
| R. Arts, Entertainment and Recreation | 5 | [x] | [x] | |
| S. Other Service Activities | 20 | 1% | 5 | |
| Unknown | 20 | 1% | 1 | |
| Total | 1,600 | 100% | 1,469 | 100% |
| 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 | 15 | 1% | [x] | [x] |
| Northern Ireland | 175 | 11% | 68 | 5% |
| 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% |
| 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% |
| 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% | ||
| £2,001 to £10,000 | 275 | 17% | 2 | |
| £10,001 to £25,000 | 260 | 16% | 4 | |
| £25,001 to £70,000 | 295 | 18% | 13 | 1% |
| £70,001 to £200,000 | 235 | 14% | 28 | 2% |
| More than £200,000 | 315 | 19% | 1280 | 96% |
| Total | 1,630 | 100% | 1,327 | 100% |
| 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% | ||
| £2,001 to £10,000 | 265 | 16% | 1 | |
| £10,001 to £25,000 | 270 | 17% | 5 | |
| £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% |
The Patent Box remains a valuable yet underutilised incentive for businesses that are investing in innovation. As the benefits grow more significant in light of recent tax rate increases, companies that hold qualifying IP should consider the potential advantages. By reviewing your position and understanding how the Patent Box could impact your tax liabilities, you can make strategic decisions that enhance your competitiveness and financial performance.
🔑 Next steps: For companies with patented inventions, now is the time to ensure you are making the most of this incentive. Consider reviewing your eligibility and long-term tax planning to determine how the Patent Box can best support your business goals.