Patent Box: streaming: method of allocation
‘Method of allocation’ means the method of allocating, for the purpose of step 2 in section 357DA(1), the amounts mentioned in that step (CIRD230110).
S357DA makes clear that to be just and reasonable, a method of allocation must normally be consistent between one year and the next, unless there is a change of circumstances that make the method inappropriate.
In this case, the company can choose to use a different method that does produce a just and reasonable result, or to exit from streaming and use the simple apportionment formula.
If the company chooses to use the simple apportionment formula it can however make a fresh streaming election for any subsequent accounting periods if it wishes to do so. However, once it re-elects to stream then it must apply this consistently year on year unless there is a change of circumstances.