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

HMRC internal manual

Film Production Company Manual

Film Tax Relief: Eligible Expenditure: UK expenditure: Services directly related to single territory

CTA2009/S1185; CTA2009 S1200

In order to determine the amount of Film Tax Relief (FTR) to which a film production company (FPC) is entitled it is necessary to determine the extent to which services and goods contributing to the film’s core expenditure are used or consumed in the United Kingdom (FPC50050).

Principal Photography

In the case of services supplied directly in relation to principal photography it should be clear where they are used or consumed.

Example 1

An FPC hires a stuntman to take part in filming which takes place on location in the UK.

The nature of the service is the provision of a specialist performance which is required by a specific scene which is filmed during the process of principal photography.

Because this principal photography takes place in the UK, the stuntman’s service is used or consumed by the FPC within the UK and therefore meets the definition of UK expenditure. This remains the case if the stuntman has been supplied by a company outside the UK, or if he were a non-UK national, or both.

Example 2

An FPC hires an actor to perform in a short scene which is filmed on location outside the UK. All the remaining scenes are filmed within the UK.

The nature of the service is again the provision of a performance which is required by a specific scene which is filmed during the process of principal photography. Because the scene in question is filmed outside the UK, the service of the actor is not used or consumed in the UK, and therefore the relevant expenditure is not UK expenditure.

A similar approach can be taken in the case of other services directly associated with principal photography, because there is a clear link to a physical performance within a specific location. These include those supplied by an actor, camera operator, focus puller, make-up artist, production manager, caterer and others directly involved in the process of principal photography. In each case, the services relate to UK expenditure to the extent to which the physical location of principal photography is within the UK.

However, it is important to note that the expenditure on these services is not UK expenditure by virtue of the fact that the service is physically performed within the UK by the supplier. Instead, it is UK expenditure because they are used or consumed by the recipient within the UK.

Other stages of production

Similar considerations will apply where the goods or services are obviously related to a single territory - for example if all of the post-production work on the soundtrack takes place a single studio.