Corporation Tax Act 2010 section 357BNB

Small claims figure election

Section 357BNB sets out how the small claims figure is calculated when a company has elected for small claims treatment under the Patent Box regime, replacing the normal marketing assets return figure with a simplified alternative.

• Where a company has made a small claims figure election, the normal marketing assets return figure in the Patent Box profit calculation is replaced by a small claims figure
• If 75% of the qualifying residual profit is below the small claims threshold, the small claims figure is simply 25% of the relevant IP income sub-stream amount after routine deductions
• If 75% of the qualifying residual profit exceeds the small claims threshold, a formula is used to calculate the small claims figure that tapers the benefit as profits increase
• The small claims threshold is £1,000,000, divided by the number of associated companies that have also elected into the Patent Box regime plus one, and reduced proportionately for accounting periods shorter than 12 months