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

HMRC internal manual

Business Income Manual

From
HM Revenue & Customs
Updated
, see all updates

Broadcasters: overview of broadcasting licences

The Office of Communication (Ofcom) is the body which regulates the TV and radio sectors, fixed line telecoms, mobiles, postal services, plus the airwaves over which wireless devices operate. Ofcom is responsible for establishing and applying codes which television and radio broadcasters are obliged to follow. Ofcom is also able to grant and renew licences, some of which are awarded by open competition between interested parties.

There are different licensing rules depending on the broadcasting service

The definition of broadcasting encompasses many different types and grades of services.

The rules for granting licences can be generally grouped into two categories:

  • licences for Mainstream Public Service broadcasters (PSB), Multichannel broadcasters and Multiplex radio broadcasters, and
  • other licences, i.e. Television Licensable Content Service (TLCS), Digital TV Programme Service (DTPS), Digital Television Additional Service (DTAS), Radio Licensable Content Service (RLCS), Radio Restricted Service Licence (RSL) and Community Radio.

Licences for Mainstream Public Service Broadcasters, Multichannel broadcasters and Multiplex radio broadcasters

TV broadcast licences granted to the PSBs (e.g. ITV, Channel 4 and Channel 5), are typically issued for a 10 year period, although Ofcom has considered granting shorter term licences and changing the criteria for their award in order to encourage other businesses to compete for PSB licences based on more innovative and diverse proposals for public service TV content.

TV broadcast licences granted to Multichannel broadcasters usually run for a 12 year period. Multiplex radio licences can be national or local and similarly run for a 12 year period.

The guidance in this chapter does not apply to the PSBs, Multichannel broadcasters and Multiplex radio broadcasters as these broadcasters are run as companies. Since 1 April 2002, companies acquiring or selling licences are subject to the rules set out in the intangible assets regime for companies. This is covered more fully in the Corporate Intangibles Research and Development (CIRD) manual.

For guidance on whether or not an intangible asset is an existing asset or a new asset for the purposes of the intangible assets regime, please see the guidance at CIRD10140.

If the intangible assets regime applies then it takes precedence over the guidance in this chapter.

Other categories of licence

Type of licence Description of service Further details
     
Television Licensable Content Service (TLCS) Services that have the principle purpose of the provision of television programmes or electronic programme guides or both, except digital terrestrial television (which requires a different licence type as described above). These are the licences awarded to each individual channel (including PSB channels) and are open-ended. A new TLCS must be issued for a new channel. If the licensee (i.e. the broadcaster of the channel) changes the licence must be transferred.
Digital TV Programme Service (DTPS) including Local Digital TV Programme Service (L-DTPS) and Digital Television Additional Service (DTAS) The nature of the service can either be editorial, teleshopping or self-promotional. An editorial service is a ‘normal’ programme service, with conventional programme material and scheduled advertising breaks. Self-promotional material is a particular kind of advertising in which the broadcaster promotes its own products, services or channels. As well as a TLCS licence, a commercial digital channel must also have either a DTPS or DTAS licence (which are both open-ended).
Radio Licensable Content Service (RLCS) The service is provided in digital or analogue form broadcast from a satellite or distributed using an electronic communications network that is to be made available for reception by members of the public and consists of sound programmes. A RLCS licence does not cover internet services or two-way services. These are the licences awarded to each individual radio station and are open-ended.
Radio Restricted Service Licence (RSL) RSLs are available for a range of uses, broadly falling under three headings: short-term RSLs (S-RSLs), long-term RSLs (L-RSLs) and Audio Distribution Systems RSLs (ADS-RSLs). S-RSLs are for coverage of special events/projects or trial services and the licence is limited to a small coverage area. L-RSLs are for an AM service with a clearly defined site. ADS-RSLs are services provided within one or more sites and are broadcast on a spectrum other than FM or AM. Note that radio licensable content services do not include internet services or two-way services.  
  Examples of services with long-term RSLs might be university, shopping centre or hospital radio, although equally these may have ADS-RSLs depending on the circumstances and in fact such radio stations could be a ‘closed user group’ which means different rules apply entirely. L-RSLs and ADS-RSLs are usually for a period of five years, S-RSLs are usually for a maximum of 28 days.    
  Community radio Community radio stations typically cover a small geographical area with a coverage radius of up to 5km and run on a not-for-profit basis. They can cater for whole communities or for different areas of interest - such as a particular ethnic group, age group or interest group. Individuals are not entitled to hold a Community Radio licence. Licences are only offered to registered companies (or equivalent bodies such as those created by statute, e.g. trusts). The licence lasts for up to five years.

More information on these types of licences and examples of licence holders are available on the Ofcom website.

As mentioned above, if the broadcaster is a company, the guidance in this chapter does not apply as companies acquiring or selling licences are subject to the intangible assets regime. This regime is covered in the Corporate Intangibles Research and Development (CIRD) manual. If the intangible assets regime applies then it takes precedence over the guidance in this chapter.

Within the other categories of licence not every broadcaster will be incorporated. This is especially the case in the case of S-RSLs. For guidance on the tax treatment of broadcasting licence fees, see BIM51460. For guidance on the tax treatment of incidental costs of obtaining a broadcasting licence, see BIM51465.