HMRC Patent Box Statistics 2020

Innovation Tax look at the key points and give their expert insights on the data contained in HMRC’s Patent Box statistics report, released in 2020

HMRC Patent Box Statistics 2020

Patent Box aims to create a competitive tax environment for companies to develop and exploit patents, supporting business investment and growth to retain the best technologies and inventions in the UK.

If businesses have any pending or granted patents, they could be eligible for a significant tax saving, whereby profits from the patented products (and/or processes) will qualify for a reduced corporation tax rate of just 10%.

Innovation Tax summarise the key points from the latest statistics released by HMRC covering the 2017/18 tax year, which provides a positive outlook showing;

7% increase in the amount of support claimed to just over £1.1billion
10% increase on the number of companies claiming the relief (1,305)
56% of claims were made by manufacturing companies, accounting for 30% of relief claimed
47% of relief claimed was by London-based companies
92% of relief claimed by large companies
34% of relief claimed by 10 companies in the ‘Financial and Insurance’ sector

In 2017-18, 1,305 companies claimed relief under the Patent Box, and the total value of relief claimed was £1.1bn.

So far in 2018-19, 1,230 companies have claimed relief under the Patent Box, with a total value of £992 million; these figures are expected to be revised upwards when more data becomes available.

If the proportion of late claims is in line with previous years, the total claim value for 2018-19 is likely to be around £1.13bn.

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 to 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; and
Locate the high-value jobs associated with the development, manufacture and exploitation of patents in the UK.

Uptake on Patent Box is still very low in comparison to the number of companies innovating and carrying out Research and Development activities in the UK

This is due primarily to a lack of awareness and understanding about the scheme itself, and how intellectual property may be used by a business to effectively leverage both commercial and tax strategies.

As a general principle, if you or your clients are claiming R&D Tax Relief, then Patent Box eligibility should be reviewed at the same time, preferably using a firm such as Innovation Tax who specialise in both Intellectual Property and Patent Box legislation as well as the R&D tax credit scheme.

HOW CAN WE HELP?

At Innovation Tax, we dedicate time to our clients and partners to inform them of changes and new developments which may be of interest and go over and above expectation to demonstrate that we are not just R&D Tax experts.

Start the conversation with a complimentary, no-obligation chat about your R&D work.

Innovation Tax specialise in helping companies access vital innovation tax incentives and grant funding to enable their businesses to grow, increase profitability, reduce risk and enable further investment in R&D, IP and capital assets.

HMRC Patent Box Statistics 2020