Beta This part of GOV.UK is being rebuilt – find out what this means

HMRC internal manual

Animation Production Company Manual

From
HM Revenue & Customs
Updated
, see all updates

Claims: how relief is claimed

Television Tax Relief (TTR) is a Corporation Tax relief. It is claimed for each relevant accounting period by completing the appropriate section in the Television Production Company’s (TPC’s) Corporation Tax self-assessment submission (CT600). It is included in the relevant section `Information about enhanced expenditure’ and required supplementary information should be included in the TPC’s accounts and computations.

The tax return must be accompanied by either an interim or final certificate, as the case may be, from the Department for Culture, Media & Sport that the animation is British (APC40030).

Additional deduction

The TPC should indicate that it is claiming TTR by completing the relevant boxes as below depending on the return version used:

Description                        CT600    Version 2\*          Version 3\*

Tax due                                                       86                         525

Creative tax credit                                        _                           540 

Amount claimed                                           87                         545

Amount payable                                           89                         570

Creative enhanced expenditure                     _                           665

Film/Creative tax relief                                167                         n/a

Enhanced expenditure                                101                         670

Payable creative tax credit                          168                         885 

 

Example

A TPC incurs total expenditure of £450k on a British animation. Of this expenditure, £400k is core expenditure. £300k (75%) of that core expenditure is incurred in the United Kingdom, and £100k (25%) elsewhere. The company is entitled to the following deductions:

  • £450k `ordinary’ deduction, plus
  • £300k additional deduction (the core UK expenditure is less than 80% of £400k, so it all qualifies (APC55020)).

Giving a total deduction of £750k.

The figure that should be entered in box 101 (the `enhanced expenditure figure’ referred to in the Note to box 101) is £300k.

Payable tax credit

If the company is claiming any payable tax credit, then it should enter the gross amount of the tax credit before any payment of tax is due in the relevant boxes as above. 

Interim claims

The legislation allows relief to be claimed on an interim basis, assuming that the required conditions have been met. An animation may or may not have a strict budget, but where one is available it should be clear whether criteria are going to be met.

Certain of the conditions which determine entitlement to relief or the amount of relief can only be met with certainty once the animation has been completed. This includes the criteria on:

  • British animation (APC40030), and
  • required minimum amount of UK expenditure (APC40040).

For a programme to be a British animation it must be certified as such by the Department for Culture, Media & Sport (DCMS) (APC40030). Certification will depend on who is involved in the production and where the animation is made. Although the initial plan may be to make a programme which qualifies as British, changes in response to circumstances (such as the unavailability of a lead actor) may mean that the eventual programme does not.

Similarly, if a programme contains elements of animation and live action, it may be that on completion the core expenditure related to the animation is less than 51%. This would mean that the programme would not qualify as an animation for the purposes of Part 15A Corporation Tax Act 2009 (APC40050). The programme may not qualify for TTR at all.

If any of the conditions are not actually met on completion of the animation, then the position is adjusted to reflect the outcome. In cases where the payable tax credit has been claimed, this will be repayable to HMRC. Interest will by chargeable on this amount but provided that no careless or deliberate error has been made, no penalty will usually be charged.

Supplementary Information

Claims should be supported by certain additional information. There are two cases with differing requirements:

  • animations which are completed within a single accounting period, and
  • animations whose production takes more than one period.

Each of these cases is covered at APC60020.