How Is Patent Box Relief Calculated?

From income to qualifying profit

HMRC's calculation deducts attributable expenses, a routine return and, where applicable, a marketing-assets return. The resulting relevant IP profit can then be restricted by the R&D nexus fraction, so the actual benefit may be lower than this simplified illustration.

Apply HMRC's streaming rules, routine and marketing return deductions, and the R&D nexus fraction to determine qualifying relevant IP profits and the Patent Box deduction.

The applicable rate still matters

Actual Corporation Tax rates vary: some companies pay the 19% small-profits rate or receive marginal relief, so their percentage-point benefit can be lower. The £50,000 and £250,000 thresholds are also adjusted for short accounting periods and divided by the number of associated companies.