UK patent box claims hit £343m in first year

Around 700 companies claimed £342.9 million ($445 million) in tax relief under the UK’s patent box scheme in the first year of its existence, statistics show.

According to official statistics from HM Revenue & Customs, just under one third of the 700 companies were large and together they claimed £327.2 million in relief.

Launched in April 2013, the patent box allows companies to apply for a lower rate of corporation tax (10%) on profits earned from products protected by patents and other intellectual property.

The standard rate of corporation tax is 20%.

The lower rate is applied to profits earned after April 1, 2013 and the relief is being phased in, meaning the full benefit of the patent box will be available from April 1, 2017.

In the first year (2013 to 2014), most companies that applied for the relief were in the manufacturing sector (63.6%), followed by the combined wholesale and retail and transport sector (16.4%).

The manufacturing companies claimed the highest value of relief under the patent box, totalling £216.9 million (£63.3%), followed by companies in IT, financial services and real estate, claiming £58.5 million, or 17.1% of the total.