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HMRC internal manual

Animation Production Company Manual

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HM Revenue & Customs
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Calculation: maximum amount of core expenditure subject to claim

S1216CF, S 1216CG Corporation Tax Act 2009

The amount of Television Tax Relief (TTR) is based on the UK core expenditure of an animation trade. The Television Production Company (TPC) will receive an additional deduction of up to 80% of the total core expenditure incurred.

A TPC can claim TTR on the lower of:

  • 80% of total core expenditure, and
  • the actual UK core expenditure incurred.

UK core expenditure is the amount of core expenditure (APC50010) incurred by the TPC which is also UK expenditure (APC50050).

In this guidance the amount on which the TPC is entitled to claim TTR is termed enhanceable expenditure.

Example 1: core expenditure all UK

A TPC incurs £200k of core expenditure on an animation, all of it in the UK.

Actual UK core expenditure > 80% of total core expenditure.

The TPC can claim TTR on 80% x total core expenditure. Enhanceable expenditure is £160k.

Example 2: core expenditure part UK, part non-UK

A TPC incurs £400k of core expenditure on an animation, of which £250k is UK expenditure. The remainder is incurred in France.

Actual UK core expenditure < 80% of total core expenditure.

The TPC can claim TTR on actual UK core expenditure. Enhanceable expenditure is £250k.

Example 3: co-production

A UK company incurs £500k of core expenditure on an animation. Its co-producer incurs a further £50,000 of core expenditure on the animation.

Actual UK core expenditure > 80% of total core expenditure.

The TPC can claim TTR on 80% x total core expenditure incurred by the TPC. Enhanceable expenditure is £400k.

Even though combined core expenditure on the animation (by both co-producers) was £550k, the limit is 80% of the total core expenditure incurred by the TPC.