Patent Box relief: the latest statistics

1. More companies elected into the Patent Box

   HMRC provisionally estimates that 1,735 companies elected into the Patent Box in 2024/25, an increase on the 1,695 companies that elected in during 2023/24.

2. Patent Box relief is projected to reach £2.28bn

   HMRC estimates that the value of relief rose to £2,283m in 2024/25 from £1,857m in 2023/24. This represents an increase of around 23% in a single year and continues a longer-term growth trend that has held in every year, except 2020/21.

3. The Corporation Tax rate change and higher eligible profits drove the increase

   HMRC attributes the increase to two factors: the continuing effect of the rise in the main rate of Corporation Tax from 19% to 25% on 1 April 2023, and an increase in the profits eligible for relief.

   Many companies had accounting periods spanning the rate change and were therefore only partly exposed to the 25% rate in 2023/24. By 2024/25, companies will generally have a full year of profits subject to 25%, increasing the value of the relief.

   HMRC also notes that higher eligible profits amongst some claimants largely reflect a recovery from unusually low levels reported in 2023/24, rather than a step change in underlying profitability.

4. Relief has risen over the life of the regime, with one dip in 2020/21

   HMRC’s figures show total relief increasing between 2013/14 and 2024/25, with a small fall in 2020/21 and a large increase in 2023/24 following the rise in the main Corporation Tax rate to 25%. The number of companies electing into the regime increased steadily from 2013/14 to 2017/18 and has grown more gradually since.

5. Large companies receive 95% of the relief

   Fewer than three in ten companies in the regime are large, yet they took 95% of the relief in 2024/25, two percentage points more than in 2023/24. The 145 biggest recipients alone took 92%. Relief follows qualifying profit, so some concentration is inevitable. Even so, the remaining 72% of companies in the regime share around 5% of the total relief, highlighting how little of the benefit reaches smaller and growing businesses.

6. One in nine companies in the Patent Box received no relief

   Around one in nine companies in the Patent Box, 185 in total, had elected in but received no relief in 2024/25. HMRC does not provide reasons, but two situations commonly seen among early-stage innovation companies may explain the outcome.

   The first is where IP-related activity makes a loss or has not yet produced qualifying profits. An election made without considering how early losses interact with later profits can reduce the relief available once those profits arise.

   The second is where patents are still pending. Companies need to be in the regime for the relevant periods if they intend to bring pre-grant profits into the claim once the patent is granted.

7. Manufacturing leads, with technology sectors close behind

   In 2023/24, companies classified within the manufacturing sector received 40% of total relief, while those in the professional, scientific and technical sector received 22%. HMRC notes that many companies undertaking research and development also manufacture or sell their products, helping to explain why these sectors account for such a large share of the relief. The data also shows manufacturing and information and communication as two of the sectors receiving the greatest levels of support.

   The sector breakdown should be treated with some caution because HMRC assigns each company a single classification based on its main activity. A business that develops patented electronics may therefore be recorded as a manufacturer if most of its revenue comes from producing and selling those products.

8. London and the East of England account for 64% of relief

   Companies based in London and the East of England are projected to have received 64% of Patent Box relief in 2024/25, up from 62% in the previous year, despite accounting for only 21% of companies electing into the regime.

   HMRC combines London and the East of England to meet confidentiality requirements. The regional figures are based on the addresses companies provide to HMRC for tax purposes, which may not reflect where the underlying economic activity takes place.

   The concentration of relief also reflects the strength of patent-led technology and life sciences activity around Cambridge and the wider East of England, where Price Bailey works with a large number of technology and life sciences businesses.

9. The 2024/25 figures will change, and there may still be time to elect

   The 2024/25 figures are estimates. They are based on deductions filed by July 2025 and scaled up using HMRC’s analysis that around 88% of deductions had typically been received by that point in previous years. Final figures will be published in Autumn 2027.

   The same two-year election window applies to individual companies. A company with a 31 December 2024 year end has until 31 December 2026 to elect into the Patent Box for that period. Businesses that have not yet considered the relief may therefore still be able to claim for profits they have already earned.

How can Price Bailey help?

If your business holds granted patents, has applications pending or exclusively licenses patented technology, the Price Bailey Tax team can help quantify the potential value of Patent Box relief. We can assess whether any accounting periods remain within the two-year election window and whether patent pending applications make it worthwhile electing into the regime now.

Read our Patent Box eligibility guide for the full rules, or speak to the team about R&D tax relief and Patent Box together by contacting us using the form below.