Corporation Tax Act 2010 section 357YF

Companies without GAAP-compliant accounts

Section 357YF explains how the patent box rules apply when a company either does not prepare accounts at all or prepares accounts that do not comply with generally accepted accounting practice (GAAP).

• Where a company's accounts are not GAAP-compliant, or no accounts are prepared at all, the patent box rules apply as though GAAP-compliant accounts had been drawn up.
• Any references to amounts recognised for accounting purposes are treated as the amounts that would have appeared in GAAP-compliant accounts for the relevant period and any pertinent earlier periods.
• An earlier accounting period is considered relevant if the figures for a later period depend, to any extent, on amounts carried forward from that earlier period.
• GAAP-compliant accounts are defined as accounts drawn up in accordance with generally accepted accounting practice.