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HMRC internal manual

Animation Production Company Manual

Losses - introduction

S1216D-S1216DC Corporation Tax Act 2009 (CTA 2009)

The profits or losses of animation activity conducted by a Television Production Company (TPC) are calculated by the rules in Part 15A CTA 2009. The animation produces profits and losses of a separate trade. TTR may create or increase losses incurred by this trade for tax purposes.

There are restrictions for losses of an animation trade of a TPC.

Losses attributable to an animation trade are only available to:

  • carry forward for relief against future profits of the same animation trade,
  • use against other profits of the company or surrender through group relief once the programme has been completed, and
  • surrender under specific Television Tax Relief (TTR) rules for terminal losses.

For normal trades not eligible for TTR or similar reliefs, losses may be set off in a number of ways including against other income or surrendering to other companies in a group. This is not possible for an animation trade within Part 15A CTA 2009 until the programme is completed.