HMRC have published their annual statistics for the uptake of Patent Box by companies, and for Research & Development Tax Credits.

The Patent Box statistics show a marked increase in both the number of companies claiming relief under Patent Box in 2014/15 (1,135 - up 37% on the 2013/14), and the total value of these claims (£651.9 million - up 78.3%).

  • Large companies claimed the lion’s share of the relief (£616.6 million) despite only making up 26.9% of the total of companies making a claim.
  • Companies operating in manufacturing made up over 50% of the total claimants.
  • Geographically, London and the South-East also dominated, making up 27.6% of the number of companies, and claiming 63.8% of the value of the claims. Northern Ireland and the North East of England were the least prolific in both categories.

Due to the manner in which Patent Box claims are made, there is effectively a two-year lag for the presentation of statistics, which is why the figures are for the tax year 2014/15.

Research & Development Tax Credit figures cover the 2015/16 year, and show an increase of 22% in the total number of claims from SMEs, and an increase of 5% for Large companies.

The increase in the number of claims from large companies was smaller than that for SMEs , as was the total number of claims (4,385 as opposed to 21,865 for SMEs), they claimed a larger amount in terms of value (£1.4bn) than SMEs (£1.3bn); this being attributed to the fact that the amounts claimed are much larger than those claimed by SMEs)

In terms of geographical spread, and industry breakdown, London and the South East dominate the figures, and manufacturing is the single largest industry.

There are notable differences between R & D credit and Patent Box: Information and Communication makes up 26% of the R&D claim total, yet only 2.6% of the Patent Box claims. This can be explained by the difficulties that arise around intellectual property protection for businesses operating in this sector, which would affect their eligibility for inclusion in the Patent Box regime.

The historical statistics for R&D claims also show large increase in first-time claims, which have more than doubled since the £10,000 de minimis figure for a claim was removed, and also a large increase in the amount of value received by companies from 2014/15 onwards, as a result of the more generous rates for SME repayable tax credits (moving from 11% to 14.5% of qualifying losses), the increase to 130% for the SME qualifying uplift, and also the phasing in of the RDEC together with its increase from 10% to 11%.

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External links:

HMRC Patent Box statisticss


HMRC R & D publication commentary