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).
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
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.
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.
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.