21 May 2026
3 min read
Unexpected issues in Patent Box calculations do happen. Read how one ABGi consultant adapted to incomplete tax data, protected claim value, and kept the process moving without creating extra burden for the client
By James Allen, ABGi UK Technical Writing Consultant
What can be done when a client’s tax computations are incomplete? Read on to discover how consultants can adapt to ensure a successful Patent Box claim can still be made without hassling the client.
The path an Innovation Funding consultant must take to reach the destination of completed financial calculations, is often fraught with perils on either side.
Identifying and calculating the correct revenue and cost streams, identifying the value of the brand as well as the routine cost functions are all areas that can be problematic.
With so many possibilities for errors; taking receipt of the client’s tax computations can seem almost a mindless task in comparison. It is understandable to just assume that the client’s accountants have provided the professional service expected of them.
To do so, however, would be naive. Accountants, like the rest of us, are fallible humans.
Occasionally, they may cut corners.
Recently, when attempting to complete the financial calculations for a large ABGi client’s Patent Box claim, the net benefit was resulting in a loss.
Given they were a profitable business with a sizeable relevant IP profits income (RIPI) this was unexpected and would also negatively impact future claims.
Subsequent investigations revealed that an unusually high admin expense figure which was then reassigned to the cost of sales was the culprit.
Most client’s tax computations do provide a clear breakdown of cost of sales, permitting a consultant to mark up what, of this figure, can be attributed to admin expenses and used to determine the qualifying residual profit (QRP).
In this instance, however, that breakdown was not provided and it was not feasible for it to be done within the client’s timelines.
Instead, a reasonable proportion of the reassignment figure was distributed to the different assigned heads.
Clients, for whatever reason, may not always be able to supply the appropriately detailed information but there are work-arounds.
And, given the potential benefits of Patent Box, it is well worth being aware of the ways a consultant can respond to such circumstances.
If you are keen to know more about Patent Box then get in touch with ABGi. Our acknowledged experts in the tax incentive space are ready to discuss your suitability.