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HMRC internal manual

Film Production Company Manual

Film Tax Relief: Eligible Expenditure: Ineligible expenditure


To qualifying for Film Tax Relief (FTR), core expenditure must be of a kind that would be taken into account under Chapter 2 Part 15 in calculating the profit/loss of the film production company’s (FPC’s) separate trade. It is not possible to give a comprehensive list of non-qualifying expenditure, but the following items merit comment.

Completion bond and other forms of insurance

Completion bonds are a form of insurance against the risk that a film may not be completed. Costs of the completion bond do not qualify for FTR. They are not incurred on film-making activities.

Other forms of insurance, more directly concerned with the film-making activity itself, may qualify. For example, the owner of a UK property used as a location may require that the property should be insured against possible damage sustained during or as a result of filming. The costs of such insurance would be allowable.

Development costs

See FPC50120 - these costs are not part of core expenditure.


Cost related to hospitality and entertainment are disallowable under normal rules - ICTA88/s577.

Publicity and promotion

Publicity and promotional costs do not qualify for FTR. They are not concerned with the making of the film.

Audit fees

These do not relate to film-making activities - they do not qualify for FTR.

Bank interest and charges

While interest itself is regarded as part of the costs of financing a film, and therefore not incurred on film-making activities, charges incurred by banks for facilities that are needed by the FPC to engage in film-making activities (e.g charges associated with the maintenance of a current account from which suppliers, cast and crew can be paid ) are part of the costs of film-making.