Corporation Tax Act 2010 section 404

Amount to be nil if basic amount negative

Section 404 provides that where the basic amount formula produces a negative result, the amount is treated as nil rather than a negative figure.

• The basic amount of a company's income is calculated using the formula in section 399(3).
• If that formula produces a negative figure, the amount is automatically treated as nil (zero).
• This prevents a negative income amount from being used for the purposes of the income calculation under section 383.
• The effect is that the minimum possible income amount under this calculation is zero — it can never go below that.