Patent box ― small claims treatment

Produced by Tolley

The following Corporation Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Patent box ― small claims treatment
  • Interaction with calculation of qualifying IP profits
  • Eligibility for small claims treatment
  • Calculating the small claims amount
  • Practical considerations
  • Making the election

Patent box ― small claims treatment

Major changes to the patent box regime were made by FA 2016 to bring it into line with the outcome of the OECD’s recommendations on tackling harmful tax practices and preferential IP regimes. See the Patent box tax regime ― overview guidance note for details. The commentary in this guidance note applies to the calculation of relevant IP profits where the company is not a new entrant, with no new qualifying IP rights for accounting periods beginning before 1 July 2021.

Interaction with calculation of qualifying IP profits

The patent box legislation sets out seven steps that should be followed in order to calculate the qualifying IP profits to which the reduced rate of corporation tax may be applied. These steps are set out in the Calculating relevant IP profits ― existing claimants with no new IP rights guidance note, which should be read in conjunction with this note.

At step 5 of the qualifying IP profits calculation, a qualifying company is able to adopt a simpler, more formulaic approach to determine how much of the qualifying residual profit (QRP) represents profit from qualifying IP rights and how much relates to brand and marketing assets. The brand and marketing prof

Popular documents