Introduction
HM Revenue & Customs (HMRC) has published its Patent Box Relief Statistics: September 2025, providing a detailed look at how many companies are using the UK’s Patent Box tax incentive and the amount of tax relief they’re receiving.
What is the Patent Box?
The Patent Box is a special UK tax regime introduced in 2013 to encourage innovation. It lets companies apply a lower rate of Corporation Tax (10%) to profits earned from patented products or intellectual property, instead of the standard corporate tax rate (which is 25% as of 2023). In practice, this works through an extra deduction on a company’s tax return, so that the effective tax rate on qualifying IP profits comes down to 10%. Companies must elect into (opt into) the Patent Box – typically within two years after the relevant profits arise to claim this benefit. The full 10% rate benefit was phased in and has been fully in place since 2017/18.
Why offer this tax break? HMRC outlines a few key policy goals of the Patent Box regime:
Boost UK Innovation:
Encourage companies to increase the development and patenting of intellectual property in the UK, and to commercialise new and existing patents domestically rather than abroad.
Manufacturing & Sales in the UK:
Incentivise companies to manufacture and sell innovative products in the UK, keeping production activities onshore.
High-Value Job Creation:
Attract and retain high-value jobs (like R&D and advanced manufacturing roles) in the UK that are associated with developing and exploiting patents.
In short, the Patent Box is designed to reward companies that invest in innovation and keep their IP-based business activities in the UK, by offering a significant tax saving on those innovation profits. Changes in 2016 tightened the rules (in line with OECD guidelines) so that the tax relief a company can claim is linked to the R&D spending it contributes to developing the patented innovation – ensuring the relief is given where substantive innovation activity happens.
Key Highlights from the 2025 Patent Box Statistics
The latest HMRC statistics (released September 2025) cover data up to the 2022/23 financial year, with provisional estimates for 2023/24. Here are the key findings at a glance:
Number of Companies Using Patent Box:
In 2023/24, an estimated 1,650 companies had elected into the Patent Box regime – almost the same as the 1,640 companies in the previous year. This suggests the number of participants has plateaued, growing only marginally (+10 companies) year-on-year.
Total Tax Relief Claimed:
The tax relief (cost to the Exchequer) provided under the Patent Box jumped to £1,977 million (≈£2.0 billion) in 2023/24, up from £1,449 million in 2022/23. That’s a sharp increase of ~36% in one year. HMRC attributes this spike largely to the rise in the main Corporation Tax rate from 19% to 25% in April 2023 – since the Patent Box still taxes IP profits at 10%, a higher standard tax rate makes the relief more valuable. (In essence, the tax saving per pound of patent profit grew due to the wider gap between 25% and 10%.)
Large Companies Dominate Relief:
Although the majority of Patent Box claimants are smaller businesses, large companies (only ~28% of participants) accounted for 95% of the total relief in 2023/24. This concentration has edged up from the previous year (large companies had 93% of relief in 2022/23), indicating that big R&D-intensive firms continue to receive nearly all of the Patent Box tax benefit.
Industry Sectors – Manufacturing Leads:
The manufacturing sector is the biggest beneficiary of Patent Box. In 2023/24, around 41% of all Patent Box relief went to manufacturing companies – reflecting the prominence of sectors like pharmaceuticals, engineering, and other high-tech manufacturing in patenting. Other knowledge-intensive sectors also benefit; for example, companies classified in “Professional, Scientific and Technical” activities comprised about 14% of total relief in 2022/23. (Many companies engage in both R&D and manufacturing, which is why manufacturing and related sectors loom large in Patent Box usage.) Notably, the Information and Communication sector is also among the top sectors claiming Patent Box relief, underlining the importance of tech and software-related innovation.
Regional Distribution of Claimants:
Patent Box users are spread across the UK, but not evenly. The region with the fewest companies claiming Patent Box is the North East of England, with only about 2% of companies in 2023/24. In contrast, the greatest share of Patent Box companies is in London and the East of England, which together accounted for roughly 21% of claimant companies. (HMRC combined London and East of England in this release for confidentiality reasons.) This likely reflects the concentration of high-tech and pharmaceutical companies in and around the South East.
Regional Share of Relief:
Even more striking, companies based in London and the East of England received about 65% of the total Patent Box tax relief in 2023/24. In other words, about two-thirds of the £2 billion tax benefit went to companies registered in those two regions. Again, this highlights a geographic concentration – though HMRC cautions that using a company’s tax address can be misleading, as a firm might have R&D or manufacturing sites across various regions despite a London head office.
Relief Concentration among Firms:
The Patent Box is also highly concentrated in a relatively small number of companies. In 2023/24, the top 145 companies (by size of Patent Box claim) accounted for 92% of all relief granted. At the same time, about 165 companies (roughly 10% of claimants) elected into the Patent Box but received no actual tax relief in that year – for example, they may not have had qualifying profits or ended up with losses. This underscores that while many companies opt into the regime, the vast majority of the tax savings are captured by a limited number of very large claims.
These highlights show that the Patent Box’s benefits are sizable (nearly £2bn a year in tax reductions) but are mostly realised by large, innovation-intensive companies – particularly in manufacturing and tech, and often based in the Greater South East of England.
Maximise Your Innovation Tax Reliefs
Are you claiming all the R&D and Patent Box reliefs your company is entitled to?
Our specialists help innovative businesses uncover hidden tax-saving opportunities —
ensuring your intellectual property and R&D investments deliver their full value.
Trends in Patent Box Usage Over Time
Since the Patent Box was introduced in 2013, both the number of companies participating and the total value of relief claimed have generally trended upward. HMRC’s data provides a year-by-year view from 2013/14 through 2023/24, revealing some interesting patterns:
Growth in Participating Companies:
From 2013 to around 2018, the number of companies electing into the Patent Box rose steadily each year. Early on, awareness and uptake of the regime were growing quickly. After 2017/18, the growth in new claimants slowed down, and the total number of Patent Box companies has increased more gradually year-to-year. By 2022/23 and 2023/24, the count has essentially leveled off at around 1,640–1,650 companies. This plateau suggests that the pool of firms for whom Patent Box is attractive or applicable might have reached saturation, or at least that any further growth is modest.
Growth in Relief Value:
The total tax relief amount has climbed significantly over the past decade. In the early years, the annual cost of Patent Box relief was much smaller (tens or hundreds of millions of pounds) but as more companies joined and began claiming the full 10% rate benefit (phased in by 2017/18), the total relief grew to over £1 billion per year. Aside from a small dip in 2020/21 (likely reflecting the economic impacts during the COVID-19 pandemic), the trend has been upward. By 2022/23 the relief cost was about £1.45 billion, and in 2023/24 it surged to roughly £1.98 billion. The especially large jump in the latest year is primarily due to the Corporation Tax rate increase (25% vs the previous 19%), which magnifies the value of the Patent Box deduction. In essence, companies are now saving more tax per pound of patent profit than before, even if their underlying patent profits were similar, resulting in a higher total relief figure.
Figure 1: Number of companies choosing to elect into the Patent Box by sector from 2013-14 to 2023-24 where 2023-24 is a projection.
As shown in Figure 1 above (based on HMRC data), the count of Patent Box companies climbed rapidly in the initial years of the scheme (2013–2018) and has since grown at a slower rate. Each stacked bar in the chart is broken down by industry sector, highlighting that manufacturing (green) and information & communication (blue) are consistently among the largest groups of Patent Box claimants. The leveling off of the total height of the bars in the last few years corresponds to the participant numbers stabilizing around the mid-1600s.
Figure 2: Total amount of relief by sector from 2013-14 to 2023-24 where 2023-24 is a projection.
Figure 2 illustrates the growth in total Patent Box relief over time. The bars are again segmented by sector, and we can see the manufacturing sector (green) contributes a large share of the relief in each year – reflecting that manufacturers (like pharmaceutical firms, for example) claim a substantial portion of the tax reduction. The slight dip in 2020/21 is visible (the bar for that year is a bit shorter), surrounded by a generally upward trend. The final bar on the right (2023/24) is significantly taller, underscoring how the combination of steady patent profits and a higher tax rate translated into a much larger tax saving that year. In fact, even though the number of claimant companies barely increased, the cost of the relief shot up by over £500 million in one year.
Who Benefits from the Patent Box? Company Size and Concentration
One striking finding in the HMRC report is that the bulk of Patent Box tax relief is concentrated among a small group of large companies. In 2023/24, only 28% of the companies using Patent Box were “large” firms (as per the EU definition, generally those with 250+ employees or substantial revenues) – but those large companies claimed around 95% of the total relief. In other words, mid-sized and smaller companies made up roughly 72% of the Patent Box participants but collectively received just 5% of the tax reduction. The dominance of large firms actually increased slightly from the previous year (it was 93% in 2022/23).
This skew is further highlighted by looking at the distribution of relief by claim size. HMRC notes that in 2023/24 the top 145 companies ranked by Patent Box claim value accounted for 92% of all relief given. At the other end of the spectrum, about 165 companies (approximately 1 in 10 of the claimants) elected into the Patent Box but ultimately claimed no relief for that year (for example, a company may have elected in anticipation of patent profits but didn’t end up having any taxable profits, or had losses or other deductions that nullified the Patent Box benefit). This distribution shows that while many companies use the regime, the financial benefit is predominantly realized by a relatively small number of highly innovative and profitable businesses.
The concentration among large companies is not surprising, given that large businesses (pharmaceutical giants, global tech companies, etc.) often have extensive patent portfolios and substantial profits to shield with the 10% tax rate. Smaller companies, even if they elect in, may have fewer qualifying IP profits or may be in early stages of R&D where profits are limited. Nonetheless, it’s notable that the Patent Box relief is so heavily weighted toward the top claimants. Policymakers likely anticipated a skew, but the 95% of relief to 28% of firms statistic underscores the scale of it.
Industry Sectors Using the Patent Box
Manufacturing companies are by far the largest users of the Patent Box by relief value. According to the 2025 statistics, an estimated 41% of all Patent Box tax relief in 2023/24 went to groups in the manufacturing sector. This makes sense – manufacturing includes pharmaceuticals, chemicals, electronics, engineering and other patent-heavy industries. Many of the UK’s patent box claimants are likely pharmaceutical companies, automotive and aerospace firms, and other manufacturers that derive substantial profits from patented products (for example, a new drug under patent, or a high-tech component).
The “Information and Communication” sector (which covers software, IT, telecoms and related technology companies) is another major sector in Patent Box, as highlighted in the figures. Along with manufacturing, tech companies claim a significant share of the relief. The Professional, Scientific and Technical Activities sector which can include R&D service firms, biotech research companies, and others – also benefits, making up around 14% of total relief in 2022/23. (In the latest data release, HMRC combined this sector with “Other” for confidentiality, suggesting a few big claimants dominate that category.)
It’s worth noting that categorizing companies by a single industry code can be tricky, since many large companies operate across multiple activities. For example, a company primarily classified as a manufacturer might also conduct significant R&D (which could classify under scientific/technical), or a tech company might also manufacture hardware. HMRC advises that the industry breakdown should be seen as a broad indication of where activity takes place, not an exact picture. Still, the data clearly indicates that innovation-intensive sectors like manufacturing and technology are the primary users of Patent Box relief.
Regional Insights: Where Patent Box Claimants Are Located
The Patent Box uptake varies across different parts of the UK. HMRC provides a regional breakdown based on the companies’ tax addresses. The London and East of England region stands out at the top: when combined, companies registered in London/East England made up about 21% of all Patent Box companies in 2023/24, the largest share of any region. This combined region also accounted for the lion’s share of the tax relief – around 65% of the total £1.977 billion relief for 2023/24. This dominant share aligns with the fact that many large pharmaceutical, tech, and manufacturing companies have their headquarters or main offices in the South East (for example, the Cambridge area in East England is a hub for life sciences, and London hosts many company HQs).
By contrast, some regions have relatively few Patent Box claimants. The North East of England saw only about 2% of Patent Box companies in 2023/24, the lowest of any UK region. Other regions like the North West, Midlands, South West, Scotland, etc., would fall in between these extremes (exact percentages for each are not given in the summary, but the implication is a long “tail” of smaller shares after London/East). It appears that the distribution of Patent Box claims mirrors the broader distribution of high-tech and R&D-intensive industries across the UK – with a heavy concentration in the South/East, and fewer claimants in more peripheral regions.
However, HMRC includes an important caveat: the regional analysis is based on the address a company has given for tax purposes (often its registered office) , which may not reflect where the actual R&D or manufacturing takes place. A company could be doing innovation in multiple sites nationwide but still be counted in one region by its HQ address. So, while London/East England companies are credited with 65% of the relief, it doesn’t necessarily mean 65% of the innovation happens in those regions – just that many Patent Box companies are headquartered there. The regional figures should thus be interpreted with caution. Nonetheless, they do highlight a likely trend: regions like London, the East (and likely the South East in general) are home to more companies taking advantage of the Patent Box, whereas regions like the North East have far fewer. This could reflect underlying economic patterns, such as the concentration of biotech, pharmaceutical, and tech companies in the Golden Triangle (London-Oxford-Cambridge) and relatively fewer such companies in the North East.
Conclusion
The HMRC Patent Box statistics for 2025 reveal a regime that is stable in uptake but growing in cost. The number of companies electing into the Patent Box has leveled off at around 1,650, suggesting that most eligible companies may already be using it. Yet the total tax relief these companies receive has surged to nearly £2 billion a year, largely thanks to changes in tax rates that make the incentive more valuable. The benefits of the Patent Box are highly concentrated – primarily accruing to large, R&D-heavy companies (especially manufacturers and tech firms), and geographically to those based in the South East of England. Just a few hundred companies account for almost all of the relief, whereas many smaller claimants see relatively modest tax savings or none at all.
Year-on-year, one emerging pattern is that Patent Box relief is becoming more expensive for the government even without a big increase in participants, due to higher corporation tax rates and possibly growing patent profits among the top claimants. Meanwhile, the policy’s goal of stimulating innovation in the UK appears to be serving chiefly the sectors and regions already strong in innovation (like pharma, manufacturing, and the greater London/East region). Policymakers and observers may watch these trends to assess if the Patent Box is meeting its objectives of broader innovation or if it primarily functions as a targeted relief for large innovative firms.
Overall, the 2025 statistics demonstrate that the Patent Box remains a significant incentive, especially for big players in the innovation economy. It rewards companies that are developing and commercialising patented technology in the UK, and its impact in terms of tax relief has grown markedly in the latest year. As the scheme continues, it will be interesting to see if the number of claimants starts to grow again (perhaps if more companies develop patentable IP) or if the relief continues to concentrate among the established innovators – and how the cost-benefit equation of this incentive is viewed in the context of encouraging UK innovation. For now, the data shows a robust but concentrated usage of the Patent Box: a testament to the UK’s leading innovative firms and a reminder of the scale of support being provided to keep those activities onshore.
Source: All data and findings are from HMRC’s Patent Box relief statistics: September 2025 official release:
Discover How Patent Box Can Work for Your Business
Whether you’re a tech startup or a manufacturing leader, our tax experts can help
you navigate the Patent Box regime and maximise your innovation incentives.
Let’s find out how much you could save.
