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HMRC internal manual

Corporate Intangibles Research and Development Manual

HM Revenue & Customs
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Patent Box: relevant IP profits: elections for small claims treatment: small claims amount


If the company is eligible to elect for small claims treatment then S357CM stipulates the relevant IP profits for the accounting period to be the lower of two amounts:

  • 75% the sum of the QRP of all the company’s trades; or
  • the small claims threshold (£1 million).

As with the relevant maximum, (CIRD220470) where there are associated companies for which a Patent Box election has effect for the relevant accounting period, or the accounting period is less than 12 months long, the threshold should be proportionately reduced.

A company with QRP of less than £1 1/3m may of course believe that it does not in reality exploit any marketing assets or the value of any marketing assets is only small. If it is able to demonstrate that this is so, applying the provisions at S357CN to S357CP may be relatively straightforward and it may choose not to elect for small claims treatment.

Conversely, it is possible that a company with QRP in excess of £1 1/3m may still wish to opt for small claims treatment to make the RP calculation simpler, provided that it does not exceed the relevant maximum or wish to claim any more than £1 million as relevant IP profits.