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HMRC internal manual

Animation Production Company Manual

Calculation: introduction

S1216AE Corporation Tax Act 2009

Television Tax Relief (TTR) is only available to Television Production Companies (TPCs) that make qualifying animations.

Qualifying animations

A company meeting the definition of a TPC (APC10110) is entitled to claim TTR on UK core expenditure (APC50010) on an animation provided:

  • the animation is intended for broadcast (APC40020),
  • the animation qualifies as a British animation (APC40030), and
  • 25% or more of the total core expenditure is UK expenditure (APC40040).

Benefits of TTR: additional deduction & surrenderable tax credit

A TPC entitled to TTR can claim an additional deduction in computing its taxable profits relating to an animation trade. See APC55020 & APC55030 for details of how the amount of the additional deduction is calculated.

The additional deduction can:

  • reduce the profits of the animation trade income arising from the sale or exploitation of the animation (so that the company pays less tax); or
  • create or increase a tax loss, which the company can surrender in return for a payable Television Tax Credit (APC55100).

TTR only available to companies

TTR is not available to individuals, either alone or within partnerships (see TPC70000), nor to investors, financial institutions and those whose involvement in animation making is confined to providing or arranging finance.

The purpose of targeting the relief exclusively at TPCs is to ensure that Government support is delivered directly to animation production and is not used as a means of avoiding tax. It also ensures that such support is delivered to animation production activity in its entirety rather than to separate television production activities.

Core expenditure used or consumed before 1 April 2013

TTR was introduced from 1 April 2013. Only expenditure used or consumed after this date is eligible for an additional deduction.

TTR is available to TPCs which commenced production of a programme before 1 April 2013 on the UK core expenditure used or consumed after that date.