Corporation Tax Act 2010 section 357BNA

Notional royalty election

Section 357BNA simplifies how the notional royalty is calculated when a company has elected for the small claims treatment using the notional royalty method.

• Where a company elects for the notional royalty approach under the small claims treatment, the normal notional royalty rules are modified
• The notional royalty percentage is fixed at 75%, replacing the usual "appropriate percentage" calculation
• The detailed rules for determining the appropriate percentage (found in subsections (3) to (6) of section 357BHA) are switched off entirely
• This simplification applies when calculating the company's relevant intellectual property profits for the accounting period in question