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HMRC internal manual

Animation Production Company Manual

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HM Revenue & Customs
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Taxation: separate trade - introduction

Part 15A Ch 2 S1216B-S1216BF Corporation Tax Act 2009 (CTA 2009)

Where a company is a Television Production Company (TPC) (APC10110) for the purposes of Part 15A CTA 2009, the production of each relevant programme (i.e. each animation) is treated as a separate trade.

A relevant programme includes all episodes and series produced within an individual contract for that programme. There can be a number of parts of a self-contained work and these are treated as a single programme (APC10100). See APC20130 for further detail of how this applies in relation to television programmes.

For each programme, the profits and losses must be calculated separately. Also, the rules applying to a trade should be applied to each relevant programme.

In producing their statutory accounts, TPCs may account for their costs and income in a number of ways. This will vary according to their operating model and how they think best represents a true and fair view of the business.

The rules in Part 15A CTA 2009 therefore set out a consistent approach to calculating taxable profits of TPCs. This applies to the separate programme trade whether Television Tax Relief (TTR) is claimed or not.

This approach is important when considering relief for losses.

There are special provisions which restrict the ways in which losses arising from a television production trade can be used and this will vary depending on whether or not the programme has been completed and the trade has ceased (APC20110). These rules only apply to relevant programmes and not to non-relevant or excluded programmes.

The TTR basis applies a revenue treatment to income and to certain types of expenditure that would otherwise be treated as capital expenditure (APC20200).