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HMRC internal manual

Film Production Company Manual

Film Tax Relief: Eligible Expenditure: UK expenditure

CTA2009/S1185; CTA2009 S1200

The amount of Film Tax Relief (FTR) to which a film production company (FPC) is entitled is determined by the amount of core expenditure (FPC50010) which is also UK expenditure.

UK expenditure is defined as:

‘…expenditure on goods and services which are used or consumed in the United Kingdom’.

The nationality of those providing the goods and services has no bearing on whether the expenditure qualifies as UK expenditure. The ‘used or consumed’ test does not focus on the supplier of goods and services but instead concentrates on the recipient or customer as the means of determining UK expenditure.

In order to determine whether an item of expenditure incurred in relation to a film should be treated as UK expenditure, it is necessary to establish:

  • the nature of the specific goods or services in question; and
  • the place where the recipient uses or consumes those goods and services.

These issues are explored further at:

FPC50070 Services not directly related to a single territory
FPC50090 Post-production services
FPC50100 Supply of goods
FPC50110 Apportioning expenditure on a ‘fair and reasonable’ basis
FPC50115 Payments to leading actors