Key finding: HMRC projects £2.283bn of Patent Box relief for 2024–25, up 22.9% year on year, while the number of electing companies rises only 2.4%. The data points to a sharp increase in value rather than a broad surge in participation.
HM Revenue & Customs has published its latest Patent Box Statistics 2026, providing the clearest picture yet of how UK businesses are using the regime and the value of the tax relief being generated.
The September 2026 release shows that Patent Box relief is projected to reach £2.283 billion for 2024–25, the highest figure in the series and an increase of approximately 23% from £1.857 billion in 2023–24.
However, the most important finding is not simply that Patent Box relief has increased.
The number of companies electing into Patent Box is rising only gradually, while the financial value of the relief has increased much more rapidly. The data also shows that relief remains heavily concentrated among a relatively small number of large companies.
Understanding why requires looking beyond the headline numbers.
HMRC attributes much of the increase to the rise in the main Corporation Tax rate from 19% to 25% from 1 April 2023, while the Patent Box rate remains at 10%. As more companies have now experienced a full accounting period under the higher Corporation Tax rate, the potential value of Patent Box has increased significantly.
The headline - Patent Box Statistics 2026
| 2023–24 | 2024–25 projection | Change | |
|---|---|---|---|
|
Companies electing into Patent Box |
1,695 |
1,735 |
+2.4% |
|
Patent Box relief |
£1.857bn |
£2.283bn |
+22.9% |
|
Profits eligible for relief |
£13.761bn |
£15.223bn |
+10.6% |
The contrast is striking.
The number of companies participating is projected to increase by only 40 companies, or approximately 2.4%, but the value of relief increases by £426 million, or almost 23%.
HMRC explains that this reflects both the continuing effect of the higher main Corporation Tax rate and an increase in projected profits eligible for Patent Box relief.
There is therefore a clear distinction between growth in participation and growth in the value of the regime.
Patent Box is not suddenly being adopted by vastly more companies. Instead, the tax benefit attached to qualifying IP profits has become substantially greater.
Why has Patent Box relief risen so sharply?
The change in Corporation Tax is central to understanding the figures.
Patent Box effectively allows qualifying profits attributable to patented inventions and certain other qualifying intellectual property rights to be taxed at 10%. The main Corporation Tax rate increased from 19% to 25% from 1 April 2023.
For a company otherwise paying Corporation Tax at 25%, this means the maximum headline differential between ordinary Corporation Tax and Patent Box taxation has increased from 19% – 10% = 9 percentage points to 25% – 10% = 15 percentage points.
In simple terms, before allowing for the detailed Patent Box calculation, the potential saving associated with £1 of qualifying Patent Box profit has therefore increased from around 9 pence to 15 pence for a company otherwise subject to the 25% rate.
That represents a two-thirds increase in the headline tax differential.
This is clearly visible in HMRC's data.
In 2022–23, profits eligible for Patent Box relief were approximately £15.872 billion, generating £1.428 billion of relief.
For 2024–25, eligible profits are projected at £15.223 billion – actually around 4% lower than in 2022–23 – yet the value of relief is projected to reach £2.283 billion, almost 60% higher than two years earlier.
This is perhaps one of the most significant findings in the underlying tables.
The increase in Patent Box expenditure is therefore not evidence of a comparable increase in underlying IP profitability. Much of it reflects the structural increase in the tax benefit available following the Corporation Tax rate change.
HMRC makes the same point in its commentary. Many accounting periods in 2023–24 straddled the 1 April 2023 Corporation Tax rate change, meaning businesses were only partially exposed to the 25% rate. By 2024–25, companies will generally have experienced a full year at the higher rate.
Eligible IP profits are recovering but have not reached their previous peak
There is another useful detail within the statistics.
Eligible Patent Box profits fell from £15.872bn in 2022–23 to £13.761bn in 2023–24. This was a fall of approximately 13%.
For 2024–25, HMRC projects a recovery to £15.223bn, an increase of approximately 11% year on year.
However, this remains below the level recorded in 2022–23.
HMRC specifically cautions that the 2024–25 increase should largely be viewed as a recovery from unusually low eligible profits in 2023–24 rather than evidence of a fundamental step-change in claimant profitability.
This is important when considering the future outlook.
The £2.283 billion headline figure should not simply be extrapolated into another 20%+ increase next year. A significant part of the growth reflects the Corporation Tax transition rather than an underlying acceleration of Patent Box activity.
Patent Box participation continues to rise – but slowly
The longer-term trend in the number of companies electing into Patent Box is also revealing.
In 2013–14, when the regime was introduced, approximately 835 companies elected into Patent Box.
The figure subsequently increased to 1,175 in 2014–15, 1,425 in 2016–17, 1,545 in 2017–18, 1,600 in 2019–20, 1,645 in 2022–23, 1,695 in 2023–24 and a projected 1,735 in 2024–25.
The number of participating companies has therefore more than doubled since the regime was introduced.
However, most of that growth occurred during the earlier years of Patent Box. HMRC itself notes that participation increased steadily between 2013–14 and 2017–18, with growth becoming much more gradual afterwards.
This suggests Patent Box has developed into a relatively mature regime.
Importantly, though, HMRC's statistics do not tell us how many UK companies could potentially qualify but do not currently elect into Patent Box. It would therefore be inappropriate to calculate an 'under-claiming rate' from these figures alone.
Nevertheless, an annual population of around 1,700 electing companies remains relatively concentrated for a nationwide innovation tax incentive.
Large companies receive 95% of Patent Box relief
Company-size data shows an especially pronounced concentration.
| Company size | Companies | Share of companies | Patent Box relief | Share of relief |
|---|---|---|---|---|
|
Large |
480 |
28% |
£2.159bn |
95% |
|
Medium |
480 |
28% |
£80m |
3% |
|
Small |
450 |
26% |
£36m |
2% |
|
Micro |
300 |
17% |
£8m |
<1% |
|
Unknown |
20 |
1% |
£1m |
<1% |
Large companies therefore represent only around 28% of companies electing into Patent Box but receive approximately 95% of the relief.
Conversely, medium, small and micro businesses collectively represent approximately 71% of companies, but account for only a small proportion of the value of relief.
HMRC reports that the concentration has actually increased slightly: large businesses accounted for 93% of relief in 2023–24 and are projected to account for 95% in 2024–25.
This does not mean Patent Box is only relevant to large companies. The data confirms that substantial numbers of SMEs participate in the regime.
It does, however, demonstrate that the aggregate Exchequer cost is overwhelmingly driven by businesses generating very large amounts of qualifying IP profit.
Just 145 companies account for 92% of all Patent Box relief
The breakdown by value of relief makes this concentration even clearer.
For 2024–25, HMRC projects that approximately 145 companies receiving more than £1 million each in Patent Box relief will account for £2.105 billion of the £2.283 billion total.
That means roughly 8% of electing companies account for 92% of the entire value of the regime.
The comparison with 2023–24 is particularly revealing.
In 2023–24, 145 companies receiving more than £1 million accounted for £1.686bn of relief. In 2024–25, 145 companies are projected to account for £2.105bn.
That is an increase of approximately £419 million within this single relief band.
Total Patent Box relief increases by £426 million.
In other words, based on the rounded HMRC tables, almost the entire projected year-on-year increase in Patent Box relief is attributable to the group of companies receiving more than £1 million each.
This is arguably one of the most significant insights from the new statistics.
The dramatic rise in Patent Box expenditure is not being driven by a broad surge across thousands of additional businesses. It is principally being driven by increased relief among companies already generating substantial qualifying IP profits.
185 companies elected into Patent Box but received no relief
Another detail worth highlighting is that HMRC estimates 185 companies elected into Patent Box but received no relief during 2024–25 – approximately 11% of companies included within the statistics.
This is important because HMRC's company numbers should not be interpreted simply as the number of businesses obtaining a tax saving.
HMRC includes companies that have elected into Patent Box even where they have no IP profits eligible for relief in that particular year.
An election and a Patent Box tax benefit are therefore not necessarily the same thing.
Manufacturing continues to dominate Patent Box participation
Patent Box continues to have a particularly strong relationship with manufacturing.
For 2024–25, HMRC projects 1,045 manufacturing companies, representing around 60% of all companies electing, with £819 million of relief, or 36% of total Patent Box relief.
Manufacturing therefore represents by far the largest sector by number of participating companies.
Interestingly, its share of Patent Box relief is smaller than its share of companies. In 2023–24, manufacturing accounted for £734 million, or 40% of total relief.
Projected relief therefore rises by approximately £85 million in 2024–25, but manufacturing's percentage share of total relief falls from 40% to 36% because relief elsewhere grows more rapidly.
Other notable projected figures include Wholesale and Retail Trade, with 175 companies and £163 million of relief, and Information and Communication, with 70 companies and £171 million of relief.
Information and Communication is particularly interesting because relatively few companies generate a disproportionately high level of relief.
In 2023–24, Professional, Scientific and Technical Activities accounted for £412 million – 22% of total Patent Box relief – from only 145 companies. HMRC has suppressed the corresponding 2024–25 relief figure for confidentiality reasons, so it is not possible to draw a reliable year-on-year conclusion for that sector.
HMRC also cautions against interpreting sector classifications too literally. Businesses are assigned according to their primary SIC classification, which does not necessarily correspond to where their R&D or patented technology sits within the organisation.
Patent Box relief remains geographically concentrated
There is also considerable geographic concentration.
For 2024–25, HMRC estimates companies registered in the combined London and East England category represent approximately 21% of electing companies but 64% of total Patent Box relief.
Those companies are projected to receive approximately £1.466 billion.
The next-largest disclosed regional amount is the South East at approximately £226 million, representing 10% of the total.
HMRC is careful to warn against treating this as a precise map of where UK innovation occurs.
Regional information is based on addresses supplied to HMRC for tax purposes. A business may have its registered office or headquarters in one region while its laboratories, manufacturing operations, R&D teams and commercial activity are located elsewhere.
The statistics therefore tell us where companies are registered for HMRC purposes rather than necessarily where their innovation takes place.
A useful warning: provisional Patent Box figures can change materially
Businesses and commentators should treat the projected 2024–25 figure cautiously.
Last year's September 2025 publication provisionally estimated that 1,650 companies would elect into Patent Box in 2023–24 and relief would total £1.977 billion.
The latest data now puts 2023–24 at 1,695 companies and £1.857 billion of relief.
The number of companies was therefore revised upwards by approximately 2.7%, while the value of relief was revised downwards by around £120 million, or 6%.
That does not make the current £2.283 billion projection unreliable, but it demonstrates why it should not be treated as a final figure.
HMRC explains that Patent Box data is inherently delayed because companies have up to two years after the end of the relevant accounting period to make their Patent Box election. Latest-year figures are therefore projected and subsequently revised as additional Corporation Tax returns and deductions are received.
The 2024–25 figures are due to be updated in the next annual release, currently planned for Autumn 2027.
What do the statistics mean for UK businesses?
Patent Box has become considerably more valuable
For businesses paying Corporation Tax at the 25% main rate, the difference between the ordinary rate and the 10% Patent Box rate can now be as much as 15 percentage points.
Before April 2023, when Corporation Tax was 19%, that difference was only nine percentage points.
The underlying Patent Box rules have not suddenly become dramatically more generous. The wider Corporation Tax environment has made the existing 10% rate substantially more valuable.
Patent Box should increasingly form part of IP and R&D planning
Patent Box should not necessarily be considered only once a patent has become commercially successful.
The regime links qualifying IP profits to the R&D undertaken in developing the relevant intellectual property through the Patent Box R&D fraction.
HMRC's rules broadly link the benefit available to the company's own qualifying R&D expenditure and certain expenditure on unconnected subcontractors, while connected-party subcontracting and acquired IP expenditure can reduce the R&D fraction.
This makes the location and structure of R&D activity, ownership of IP, licensing arrangements and record keeping potentially important long before a Patent Box calculation is prepared.
R&D tax relief and Patent Box should not be viewed in isolation
The two regimes serve different purposes.
R&D tax relief generally provides support for qualifying expenditure incurred while attempting to achieve scientific or technological advances.
Patent Box provides a lower effective Corporation Tax rate on qualifying profits arising from patented technology and certain equivalent IP.
HMRC specifically confirms that the R&D expenditure used within the Patent Box R&D fraction does not necessarily require the company to have made an R&D tax relief claim.
For innovative businesses, however, there is often a natural progression:
R&D→
Intellectual Property→
Patent Protection→
Commercialisation→
Qualifying IP Profit→
Patent Box
Looking at these stages together can therefore be considerably more effective than treating the tax regimes, patent strategy and commercialisation strategy as separate exercises.
SMEs should not assume Patent Box is only for large businesses
The value of the national relief is unquestionably dominated by large companies.
But the statistics also show hundreds of medium, small and micro businesses electing into the regime.
The relevant question for an individual company is not whether its potential claim resembles that of a multinational pharmaceutical or manufacturing group. It is whether the company owns or exclusively licenses qualifying IP, has undertaken the necessary qualifying development and is generating relevant income and profits from that technology.
HMRC's guidance requires a claimant to hold qualifying IP rights or appropriate exclusive rights and satisfy the qualifying development requirements. A significant contribution must generally have been made to creating or developing the patented invention or a product incorporating it.
The outlook for Patent Box
The latest figures suggest that Patent Box is entering a new phase.
The early years of the regime were characterised by rapid growth in the number of companies participating.
Today, participation is growing much more slowly.
The more important change is now the economic value of each pound of qualifying Patent Box profit.
Provided the Patent Box rate remains at 10% and the main Corporation Tax rate remains at 25% for companies within that rate, the 15-percentage-point differential means the regime is structurally more valuable than it was before April 2023.
Current government tax policy maintains the Patent Box and the 10% rate, while the Corporate Tax Roadmap includes commitments to maintain key elements of the regime and cap the main Corporation Tax rate at 25%.
That provides a relatively stable backdrop for businesses making longer-term investment decisions around intellectual property and R&D.
However, we would be cautious about expecting another increase on the scale seen between 2023–24 and 2024–25 purely from the current data.
A substantial element of the latest rise is the delayed full-year effect of the Corporation Tax increase. HMRC also says the increase in eligible profits partly represents a recovery from unusually low 2023–24 levels.
The next question is therefore whether the amount of underlying qualifying IP profit begins growing materially, rather than simply the tax value attached to those profits.
That will be one of the most important measures to watch in future releases.
The bigger picture
The September 2026 statistics reinforce several important trends.
Patent Box has grown from 835 participating companies and £376 million of relief in 2013–14 to a projected 1,735 companies and £2.283 billion of relief in 2024–25.
The number of participating companies has therefore more than doubled, while the annual value of relief is now more than six times its introductory-year level.
Those figures need to be interpreted carefully because Patent Box was phased in during its early years and Corporation Tax rates have subsequently changed. Nevertheless, the direction of travel is clear.
Patent Box has developed into a significant component of the UK's innovation tax landscape.
The latest statistics also show that its value is highly concentrated: large businesses account for 95% of relief and just 145 companies account for 92% of the projected total.
For the wider business population, the question is therefore not simply how much the government spends on Patent Box, but whether companies developing and commercialising patented technology are properly considering the regime as part of their broader R&D, intellectual property and tax strategy.
Reviewing Patent Box eligibility
Businesses may wish to review their position where they:
- Own UK, European or other qualifying patent rights
- Hold qualifying exclusive licences over patented technology
- Have developed or significantly contributed to patented inventions or products incorporating them
- Manufacture or sell products incorporating patented technology
- Receive licence or royalty income connected with qualifying patents
- Use patented processes or technology within their operations; or
- Are currently undertaking R&D that may generate commercially valuable patentable IP
Patent Box calculations can become complex, particularly where businesses operate multiple product lines, hold several patents, undertake R&D through different entities or subcontractors, acquire IP, or have intra-group licensing arrangements.
The election also has a time limit. HMRC states that companies generally need to elect into Patent Box within two years after the end of the accounting period in which the relevant profits and income arise.
Early assessment is therefore important. Businesses should ideally consider Patent Box eligibility alongside their R&D, patenting and commercialisation strategy rather than waiting until an election deadline approaches.
Conclusion
HMRC's 2026 Patent Box statistics show a regime whose financial significance is increasing rapidly.
Projected relief has risen to a record £2.283 billion, up approximately 23% in a single year, while the number of companies electing into Patent Box has increased by only around 2%.
The principal drivers are the widening gap between the 25% main Corporation Tax rate and the 10% Patent Box rate, together with a recovery in qualifying IP profits.
At the same time, the data highlights a striking concentration of benefit: large companies receive 95% of relief and just 145 companies account for 92% of the projected total.
The immediate outlook is therefore less about explosive growth in the number of Patent Box users and more about the increasing value of the regime to companies that successfully develop and commercialise qualifying patented technology.
For innovative companies, particularly those already investing significantly in R&D, the latest figures provide a timely reason to consider whether their intellectual property strategy and tax strategy are sufficiently joined up.
Where qualifying patents, R&D activity and profitable commercialisation come together, Patent Box can now have a substantially greater financial impact than it did only a few years ago.
Sources
- HM Revenue & Customs, Patent Box relief statistics: September 2026
- HM Revenue & Customs, Patent Box relief statistics tables: September 2026
- HM Revenue & Customs, Use the Patent Box to reduce your Corporation Tax on profits
- HM Revenue & Customs, Corporate Intangibles Research and Development Manual – Patent Box R&D fraction
- HM Revenue & Customs, Patent Box relief statistics: September 2025
Click here to view the R&D Tax Credit statistics which were released alongside the Patent Box Statistics.