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HMRC internal manual

Film Production Company Manual

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HM Revenue & Customs
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Calculation: maximum amount of core expenditure subject to claim

CTA2009/S1199 & 1200

The amount of Film Tax Relief (FTR) is based on the UK core expenditure, up to a maximum of 80% of the total core expenditure incurred by the film production company (FPC).

An FPC can claim FTR on the lower of either:

  • 80% of total core expenditure; or
  • the actual UK core expenditure incurred.

UK core expenditure is the amount of core expenditure (FPC50010) incurred by the film production company which is also UK expenditure (FPC50050).

In this guidance the amount on which the FPC is entitled to claim FTR is termed enhanceable expenditure.

Example 1: core expenditure all UK

An FPC incurs £2m of core expenditure on a film, all of it in the UK.

Actual UK core expenditure > 80% of total core expenditure.

FPC can claim FTR on 80% x total core expenditure (£2m) = £1.6m.

Example 2: core expenditure part UK, part non-UK

An FPC incurs £4m of core expenditure on a film, of which £2.5m is UK expenditure. The remainder is incurred in France.

Actual UK core expenditure < 80% of total core expenditure.

FPC can claim FTR on actual UK core expenditure (£2.5m).

Example 3: co-production

A UK company incurs £5m of core expenditure on a film. Its co-producer incurs a further £500,000 of core expenditure on the film.

Actual UK core expenditure > 80% of total core expenditure.

FPC can claim FTR on 80% x total core expenditure (£5m) = £4m.

Even though combined core expenditure on the film (by both co-producers) was £5.5m, the limit is 80% of the total core expenditure incurred by the FPC.