C1Part 15Film production
Chapter 3Film tax relief
Additional deductions
1199Additional deduction for qualifying expenditure
1
If film tax relief is available to the company, it may (on making a claim) make an additional deduction in respect of qualifying expenditure on the film.
2
The deduction is made in calculating the profit or loss of the separate film trade.
3
In this Chapter “qualifying expenditure” means core expenditure on the film that falls to be taken into account under Chapter 2 in calculating the profit or loss of the separate film trade for tax purposes.
4
The Treasury may by regulations—
a
amend subsection (3), and
b
provide that expenditure of a specified description is or is not to be regarded as qualifying expenditure.
1200Amount of additional deduction
1
For the first period of account during which the separate film trade is carried on, the amount of the additional deduction is given by—
where—
E is—
(a) so much of the qualifying expenditure as is UK expenditure, or
(b) if less, 80% of the total amount of qualifying expenditure, and
R is the rate of enhancement (see subsection (3)).
2
For any period of account after the first, the amount of the additional deduction is given by—
where—
E is—
(a) so much of the qualifying expenditure incurred to date as is UK expenditure, or
(b) if less, 80% of the total amount of qualifying expenditure incurred to date,
R is the rate of enhancement (see subsection (3)), and
P is the total amount of the additional deductions given for previous periods.
3
The rate of enhancement is—
a
for a limited-budget film, 100%, and
b
for any other film, 80%.
4
The Treasury may by regulations amend the percentage specified in subsection (1) or (2).
Pt. 15 applied (with modifications) by S.I. 2007/1050, regs. 3-12 (as amended (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 2 para. 131 (with Sch. 2 Pts. 1, 2))