Whether you’re developing new products, refining processes, or investing in your own technology, innovation is a major driver of business growth. But it can also be costly.
What many businesses don’t realise is that some of that investment may already qualify for government support — and that with a bit of planning, you can turn innovation into a long-term tax asset.
Here we explain how R&D tax relief and Patent Box can work together to help businesses like yours recover development costs, reduce future Corporation Tax, and make innovation part of your growth strategy.
We’ll cover the benefits, how it works in practice, and why partnering with a trusted, technical advisor is often the most sensible route.
Innovation tax reliefs such as R&D tax relief and Patent Box are a key part of the government’s strategy to boost productivity and economic growth. They help businesses offset the cost of developing new products, services or processes. In practice, these schemes can give companies vital breathing space, the R&D tax helping to de-risk the process. It gives cash flow back in the future, allowing to do a lot more and making investors’ money work harder.
R&D tax relief helps cover the cost of development, while Patent Box reduces Corporation Tax to 10% on profits derived from patented innovations. Together, they create a tax-efficient way to support your business as it grows.
R&D tax relief
Patent Box
You may already be claiming one of these, but very few businesses take advantage of both.
Combining R&D and Patent Box gives you a complete, tax-smart innovation strategy. Used together, they create a joined-up approach: you’re not only backing your innovation financially, you’re building future tax efficiency into your business model.
A good innovation strategy doesn’t just ask “what can we protect?” — it also asks “what’s the tax value of what we’re building?”
It’s not just about protecting your R&D and innovation with patents, but also about creating a tax asset through Patent Box, which makes your business more attractive overall.
Patent Box, another Government innovation tax incentive, is the next logical step.
How much could Patent Box be worth to your business?
Despite being available since 2013, Patent Box is massively underused. HMRC’s latest statistics show over 65,000 R&D tax relief claims in 2022–23, but only 1,600 Patent Box claims.
If you take the total amount of ‘relief’ for Patent Box claimed last year, it comes to £1.47Bn. There are only 1,600 claimants, so the average claim value is circa £1M.
BUT:
This is a missed opportunity. Yet many businesses are unaware of it or assume it’s only for large companies. In reality, SMEs can and do benefit. With the right guidance, even niche or process patents can become a valuable tax asset.
How?
Patents can increase the value of a business considerably:
Tax efficiency:
These provide levers to achieve the business goals:
See how it works: For a concrete example, take a look at this case study →
If you want to have access to innovation tax reliefs without exposing your company to risk, ABGi is a trusted, practical partner. We’re here to help businesses identify and claim the reliefs they’re entitled to — and plan for the ones they’re not using yet.
We’ve worked with hundreds of UK companies to build joined-up R&D and IP strategies that deliver real value, while keeping the process simple and secure.
Here’s how we work:
Straightforward, objective advice
We’ll always give you a realistic view of what’s eligible — and we’re just as happy to say “no” as “yes.”
Technical strength
All our consultants have real industry experience, are UK-based and understand both the science and the numbers. Meet the team →
Robust, HMRC-compliant claims
We produce detailed, high-quality reports that meet HMRC expectations. We don’t outsource report writing, and our challenge rates remain low.
Patent Box guidance
We help you understand what qualifies — and how to get there, even if you don’t currently hold patents.
Enquiry defence included
If HMRC raises a query, we’ll manage the enquiry at no extra charge, from initial contact to final agreement.
Flexible involvement
We do most of the work: gathering information, writing the technical narrative, calculating eligible costs, and managing digital submissions. You stay in control and can be involved as much or as little as you like, we’ll tailor the process to your business.
If you’re innovating, you could already be sitting on a valuable tax asset — but unless someone shows you how the pieces fit together, it’s easy to miss.
R&D tax relief and Patent Box work best when they’re part of the same conversation.
Let’s start that conversation. We’ll help you build a strategy that supports growth and turns your ideas into lasting value.
