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HMRC internal manual

Film Production Company Manual

Calculation: introduction


Film Tax Relief (FTR) is only available to film production companies (FPCs) that make qualifying films.

Qualifying films

A company meeting the definition of an FPC (FPC10110) is entitled to claim FTR on its UK core expenditure (FPC50010) on a film provided:

  • the film is intended for theatrical release (FPC40020);
  • the film qualifies as a British film (FPC40030);
  • 25% or more of the total core expenditure is UK expenditure (FPC40040); and
  • the first day of principal photography takes place on or after 1 January 2007.

Transitional films

Under transitional provisions, films which commenced principal photography before 1 January 2007 but were still uncompleted at that date may also claim the relief, subject to meeting the first three conditions above.

For further information on these transitional provisions, see FPC90030.

Benefits of FTR: additional deduction & surrenderable tax credit

An FPC entitled to FTR can claim an additional deduction in computing its taxable profits relating to the film. See FPC55020 & FPC55030 for details of how the amount of the additional deduction is calculated.

This deduction can benefit the company:

  • by being set against income arising from the sale or exploitation of the film (so that the company pays less tax); or
  • by creating or increasing a tax loss, which the company can surrender in return for a payable Film Tax Credit (FPC55100).

FTR only available to companies

FTR is not available to individuals, either alone or within partnerships, nor to investors, financial institutions and those whose involvement in film making is confined to providing or arranging finance.

The purpose of targeting the relief exclusively at FPCs is to ensure that Government support is delivered directly to film production and is not used as a means of avoiding tax. It also ensures that such support is delivered to film production activity in its entirety rather than to separate film-making activities.