Finance Act 2024

Part 2 U.K. Amendments consequential on Part 1

Films Act 1985 U.K.

2 (1) The Films Act 1985 is amended as follows.

(2) In section 6 (certification of British films), after “purposes of” insert “audiovisual expenditure credit and”.

(3) In Schedule 1 (certification of British films)—

(a) in the heading, after “purposes of” insert “audiovisual expenditure credit and”;

(b) in paragraph 1(1), for the definition of “film production company” substitute—

• ““film production company”, in relation to a film, means a company that is the production company for the film for the purposes of Part 14A of the Corporation Tax Act 2009 (see section 1179DP of that Act) or the film production company in relation to the film for the purposes of Part 15 of that Act (see section 1182 of that Act).”

FA 1998 U.K.

3 (1) Schedule 18 to FA 1998 (company tax returns etc) is amended as follows.

(2) In paragraph 10 (certain claims and elections to be included in tax return)—

(a) in sub-paragraph (4), for the words from “for” to “or” substitute “under Parts 14A to”;

(b) after sub-paragraph (4) insert—

“(4A) An election under section 1179B of the Corporation Tax Act 2009 (opting into Part 14A of that Act) can only be made by being included in a company tax return.”

(3) In the heading of Part 9D, for the words from “for” to “or” substitute “under Parts 14A to”.

(4) In paragraph 83S (application of Part 9D), for “the following reliefs—” substitute “—

“(za) audiovisual expenditure credit or video game expenditure credit,”.

FA 2007 U.K.

4 In Schedule 24 to FA 2007 (penalties for errors), in paragraph 28(fa) (meaning of “corporation tax credit”), before paragraph (iv) insert—

“(iiia) an audiovisual expenditure credit or video game expenditure credit under Chapter 3 of Part 14A of CTA 2009 (expenditure credit in respect of films, television programmes and video games),”.

CTA 2009 U.K.

5 (1) CTA 2009 is amended as follows.

(2) For sections 808 to 808E substitute—

“807A Assets representing expenditure on separate creative production trade

This Part does not apply to an intangible fixed asset held by a company treated as carrying on a separate trade under any of Parts 14A to 15E (production of films, television programmes, video games, theatrical productions, orchestral concerts and museum and gallery exhibitions), so far as the asset represents expenditure of that separate trade.”

(3) In section 1040ZA (restrictions on claiming other reliefs where R&D relief given), before subsection (1) insert—

“(A1) For provision prohibiting audiovisual expenditure credit or video game expenditure credit being given where relief is available under this Part, see sections 1179DT and 1179FL.”

(4) In Schedule 4 (index of defined expressions), at the appropriate places insert—

“accounting period (in Part 14A)

sections 1179DY(1) (in relation to films and television programmes) and 1179FQ(1) (in relation to video games)”;

“animation (in Part 14A)

section 1179EA(3)”;

“audiovisual expenditure credit

section 1179D(3)”;

“company tax return (in Part 14A)

section 1179AC”;

“completed (in Part 14A)

sections 1179EB (in relation to films and television programmes) and 1179FS (in relation to video games)”;

“completion period (in Part 14A)

sections 1179DY(2) (in relation to films and television programmes) and 1179FQ(2) (in relation to video games)”;

“co-producer (of a qualifying co-production) (in Part 14A)

section 1179DQ”;

“core expenditure

sections 1179DS (in relation to films and television programmes) and 1179FK (in relation to video games)”;

“development activities

section 1179FR”;

“development company (in Part 14A)

section 1179FI”;

“film (in Part 14A)

section 1179DA”;

“group (in Part 14A)

section 1179AD”;

“opt-in period (in Part 14A)

section 1179B(3)”;

“pre-completion period (in Part 14A)

sections 1179DY(4) (in relation to films and television programmes) and 1179FQ(4) (in relation to video games)”;

“principal photography (in Part 14A)

section 1179EA(2)”;

“production (in Part 14A)

section 1179AA(9)”;

“production activities (in Part 14A)

section 1179EA(1)”;

“production company (in Part 14A)

section 1179DP”;

“qualifying company (in Part 14A)

sections 1179D(1) (in relation to films and television programmes) and 1179F(1) (in relation to video games); and see also section 1179BA(5)”;

“qualifying co-production (in Part 14A)

section 1179DQ”;

“qualifying film (in Part 14A)

section 1179DB”;

“qualifying production (in Part 14A)

sections 1179D(1) (in relation to films and television programmes) and 1179F(1) (in relation to video games); and see also section 1179BA(5)”;

“qualifying television programme (in Part 14A)

section 1179DE”;

“qualifying video game (in Part 14A)

section 1179FA”;

“the separate production trade (in Part 14A)

section 1179B(3)”;

“television programme (in Part 14A)

section 1179DD”;

“UK expenditure (in Part 14A)

section 1179AB”;

“video game expenditure credit

section 1179F(3)”.

CTA 2010 U.K.

6 (1) CTA 2010 is amended as follows.

(2) In section 45A(3) (conditions for carrying forward trade loss against total profits), in paragraph (b)(ii), after “section” insert “1179BF,”.

(3) In Part 8A (profits from exploiting patents etc)—

(a) in section 357BJB (deductions that are not routine deductions in calculating relevant IP profits)—

(i) in subsection (1), after paragraph (d) insert—

“(da) subsection (7A) (expenditure on the production of films, television programmes and video games),”;

(ii) after subsection (7) insert—

“(7A) Head 4A is the amount of any expenditure in respect of which the company is entitled to an audiovisual expenditure credit or video game expenditure credit under Part 14A of CTA 2009.”;

(b) in section 357CG (adjustments in calculating relevant IP profits), in subsection (4), after paragraph (a) (but not the following “and”) insert—

“(aa) the amount of any audiovisual expenditure credit or video game expenditure credit under Part 14A of CTA 2009 brought into account in calculating the profits of the trade for the accounting period,”.

(4) In Part 8B (profits taxable at Northern Ireland rate), after Chapter 10 insert—

“Chapter 10A U.K. Films, television programmes and video games qualifying for expenditure credit

Introduction U.K.

357QE Application and interpretation

(1) This Chapter makes provision about the interaction between this Part and Part 14A of CTA 2009 (films, television programmes and video games).

(2) This Chapter applies if—

(a) a company is a Northern Ireland company in an accounting period,

(b) the company is treated under Part 14A of CTA 2009 as carrying on a separate trade in that period (see 1179B of that Act), and

(c) that trade is a qualifying trade.

(3) References in this Chapter to “the Northern Ireland company”, “the accounting period” and “the separate trade” are to be read accordingly.

Expenditure credit U.K.

357QF Expenditure credit to count towards mainstream profits or losses

(1) Subsection (2) applies if, under section 1179CB of CTA 2009 (expenditure credit under Part 14A of CTA 2009 to be taxable receipt), the Northern Ireland company brings an amount of audiovisual expenditure credit or video game expenditure credit into account in calculating the profits of the separate trade for the accounting period.

(2) The amount is to form part of the mainstream profits or mainstream losses of the trade for that period.

Losses of separate trade U.K.

357QG Carrying forward of production losses

(1) If the accounting period is a pre-completion period within the meaning of section 1179BF of CTA 2009 (carrying forward of production losses in separate trade), that section applies in relation to the separate trade and that accounting period subject to the following provisions.

(2) In subsection (1) of that section, the reference to a loss is to be read as a reference to—

(a) any Northern Ireland losses, or

(b) any mainstream losses;

and the rest of that section is to be read accordingly.

(3) Subsection (4) applies if the Northern Ireland company has in the accounting period—

(a) both Northern Ireland losses of the separate trade and mainstream profits of that trade, or

(b) both mainstream losses of the separate trade and Northern Ireland profits of that trade.

(4) The company may, despite section 1179BF(2) of CTA 2009, claim under section 37 (relief for trade losses against total profits) for—

(a) relief for those Northern Ireland losses against those mainstream profits, or

(b) relief for those mainstream losses against those Northern Ireland profits.

357QH Transfer of terminal loss

(1) Subsection (2) applies if—

(a) the Northern Ireland company ceases to carry on the separate trade in the accounting period,

(b) as a result, section 1179BG of CTA 2009 (transfer of terminal loss in separate production trade to other production or group company) applies, and

(c) the amount in respect of which it applies (see subsection (1)(b) of that section) represents a Northern Ireland loss.

(2) The references to a loss in subsections (2) and (3)(b) of that section are to be read as references to a Northern Ireland loss.”