Key takeaways
- Annual Patent Box statistics indicate an increase in both the number of companies electing into the regime and the value of the relief.
- Large businesses, manufacturing and London-based companies continue to dominate, though regional pockets and a growing awareness among SMEs emerge.
The government has published its annual Patent Box statistics for the tax year 2024/25.
Although provisional, the figures reveal that a total of 1,735 companies have elected into the Patent Box regime, representing an increase on 2023/24, when 1,695 companies were elected in.
The value of the relief is estimated to have increased too, from £1,857 million in 2023/24 to £2,283 million in 2024/25. The main drivers for this are noted as the continuing effect of the change in the main rate of Corporation Tax from 19% to 25% on 1 April 2023 and “an increase in the profits eligible for relief” – indicating a potential rise in the number of companies reporting profits from IP.
Of the companies benefiting from Patent Box in 2024/25, 28% were large companies, which received 95% of the total relief – a figure that remains static from 2023/24.
While these headline figures offer little by way of new insights into this valuable, yet underutilised relief, the accompanying tables provide a glimpse of potential emerging trends.
SMEs feel the benefit
Large businesses remain by far the biggest group of relief recipients, with 480 businesses receiving a total of £2,159 million in 2024/25 (95% of the total relief).
Notably though, at the other end of the spectrum, traction amongst SMEs has gained momentum. The number of SMEs electing in is up by 4.2% and the total value of relief for this group is up by 18% to an average of £100,813.
Extract small companies from the overall SME figure and the uptick is even more stark. An additional 30 small businesses benefited in 2024/25 (an increase from 420 to 450), with the value of the relief rising from £21m in 2023/24 to £36m in 2024/25. This represents a significant overall uplift of 71.4%.
South West leads regional uptake
London and East England-based companies received the largest share of the relief at 64%, with the South East receiving the second biggest share at 10%. Elsewhere in the table, the South West, West Midlands and Scotland are tied at 4%.
Of those, the South West statistic is perhaps the most interesting. The data points to ten additional companies benefitting from the relief in the region and a big increase in the overall value of the relief received. This has almost doubled from £48 million in 2023/24 to £95 million in 2024/25, representing the largest increase of any region.
Manufacturing remains strong
Across the sectors, and in line with last year’s statistics, manufacturing continues to dominate. 1,045 businesses in this sector benefitted from the relief (marginally up from 1,040 in 2023/24), which represented 60% of the total number.
Wholesale and retail trade sat significantly behind manufacturing with 175 companies (10% of the total) having benefited from Patent Box. Notably though, this amounted to £163 million in relief, a considerable uplift from £114 million in 2023/24.
Awareness remains low, but pockets emerge
That the number, type and location of businesses receiving the relief has changed little since 2023/24 comes as little surprise to those of us advising on Patent Box. We have long called for greater awareness of the incentive, given the huge disparity in the number of registered patents compared to the number of Patent Box recipients.
Growing awareness amongst SMEs, in particular small businesses, offers cause for celebration though – an insight that we hope to see consolidated in 2025/26. We’ll also be keenly watching to see if the South West – home to ForrestBrown’s headquarters – continues to benefit from the relief in such growing numbers.
In the meantime, it’s important for businesses with registered patents to keep the benefits of Patent Box front of mind. Remember that the regime can be elected into before the patent is granted and any claim backdated for up to six years. Relief can also apply to worldwide income routed through UK accounts.
What is Patent Box relief?
Patent Box relief rewards your intellectual property (IP) investment by helping to reduce your Corporation Tax rate on qualifying IP income to 10%.
Certain eligibility criteria apply in order to claim the relief. This includes:
- Being liable to UK corporation tax.
- Making profits from the exploitation of patented inventions.
- Owning or having an exclusive licence over patents.
- Undertaking qualifying development of the patent.
- Where part of a group company, meeting the active ownership condition.
Find out the answers to all of your patent box questions on our explained page or discover how ForrestBrown can support you with Patent Box Relief.
Ready to claim Patent Box relief?
If you think your business meets the criteria for Patent Box eligibility, why not get in touch with our team of experts, who can guide you through the process?