Updated Patent Box relief statistics

Recently published annual statistics from HM Revenue and Customs (HMRC) estimate that the number of companies elected into Patent Box will decrease in the tax year 2021 to 2022 compared with the previous year (from 1,610 to 1,510 companies). 

UK Patent Box enables companies to apply a lower rate of Corporation Tax in the UK to profits earned after 1 April 2013 from qualifying patented inventions and equivalent forms of intellectual property. This is designed to encourage companies to keep and commercialise intellectual property in the UK.  See my previous article for a bit more detail.

Conversely to the decrease in the number of companies, it is projected that the value of relief claimed under the Patent Box went up from £1,196 million in the tax year 2020 to 2021 to £1,363 million in the tax year 2021 to 2022.  This would continue the overall trend of ever increasing value of relief claimed year on year from its introduction in tax year 2013 to 2014 (except that there was a reduction in the tax year 2020 to 2021 compared to the previous year, perhaps due to the Covid pandemic).

The increase in value of relief in 2021-2022 was primarily driven by large companies claiming more tax relief on average. This, combined with the reduction in companies elected into Patent Box, again highlights that there are opportunities for more businesses to benefit from this system.  Companies may not be aware that they have patentable technologies and processes that have not yet been protected (and could be used for Patent Box).  Time taken to review a company’s product development with this in mind could really pay off in the long run.

For more information on how we can help to protect your Intellectual Property and derive further benefits from doing so, please get in touch.