Calculation: surrenderable losses and Television Tax Credit - examples - single-period productions
The following examples illustrate how Television Production Companies (TPCs) that sustain a surrenderable loss can surrender that loss in return for a payable tax credit (APC55100). In each case the production is completed within a single period.
A TPC makes an animation with total core expenditure of £1m, all of which is UK expenditure. The animation was commissioned by a broadcaster which pays £900k for it.
|Pre-TTR profit (loss)||(£100k)|
|(UK core expenditure of £1m x 80%)|
|Post-TTR profit (loss)||(£900k)|
The surrenderable loss is the lesser of:
- the trading loss: £900k and
- the enhanceable expenditure on which the additional deduction for period: £800k.
In this case, the TPC can surrender up to £800k.
The amount of credit due is:
the payable credit rate: 25%
the loss surrendered: £800k
giving a payable credit of £200k. This is equal to 20% of the total core expenditure. The TPC is not obliged to surrender the entire loss, but it will most likely do so.