Companies exploiting patented technology in the UK have been able to benefit from significant tax savings since the introduction of the patent box in 2013. The patent box effectively provides a 10% rate of corporation tax arising from patented technology.
Latest statistics from HMRC indicate there’s a sizable increase in the number of patent box claims with a total of 1,405 companies making claims in 2018-2019 compared to 1,305 in 2017-2018. The value of relief being claimed has continued to increase year on year to £1.13bn which can partly be attributed to the phasing in of the patent box benefit.
More than 28% of the companies claiming in 2018-2019 were ‘large’ accounting for 92% of the relief claimed. The manufacturing sector (including pharmaceuticals) remained the largest claimants with more than half (54%) of the companies that claimed coming from this sector.
The number of claimants varies significantly by region with the South East having the highest number of claimants (16%) with the lowest being in the North East (2%). The statistics also show that as in the prior year the claims of companies in London are higher in value accounting for just under half (48%) of the total relief in 2018-2019.
The European Patent Office’s statistics show that there has been a 77% increase in EU patents granted to UK companies over the period from 2014 to 2019 but that applications fell in 2020. This trend was also reflected in the number of companies claiming patent box over the same period.
